Did Roku’s (ROKU) Steady Pricing Amid Inflation Just Shift Its User Growth Narrative?

• Between 2022 and 2024, Roku’s active user base grew from 70 million to 90 million as the company kept its hardware and service prices steady despite industry-wide inflation.

• This consistent approach to pricing allowed Roku to retain and attract customers, resulting in meaningful gains in user engagement and financial outcomes when competitors raised prices.

• We will now consider how Roku’s disciplined pricing during inflation, which boosted user growth, might affect its investment narrative moving forward.

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To be a Roku shareholder, you’d need to see the company’s user-focused approach and stable pricing as key to future growth in an industry where competition and changing consumer habits move quickly. The recent steady user growth is positive, but it doesn’t materially change the near-term catalyst of advertising revenue expansion, nor does it significantly offset the biggest risk: ongoing pressure from tech giants aggressively expanding into streaming hardware and platforms.

A relevant development tied to Roku’s platform strength is its June 2025 partnership with Amazon Ads to boost Connected TV advertising reach across 80 million US households. This move could reinforce Roku’s primary short-term catalyst, growing platform monetization, by strengthening its advertising business and deepening its relationships with major advertisers.

Yet, with larger ecosystem players intensifying their push into streaming, investors should be aware that…

Read the full narrative on Roku (it’s free!)

Roku’s narrative projects $6.1 billion in revenue and $372.1 million in earnings by 2028. This requires 11.4% yearly revenue growth and a $433.6 million earnings increase from the current earnings of -$61.5 million.

Uncover how Roku’s forecasts yield a $103.27 fair value, a 9% upside to its current price.

Simply Wall St Community members have posted 10 fair value estimates for Roku that range from US$84.40 to US$157.81 per share. While many see advertising growth as a future driver, be aware that dominant competitors remain a key concern for continued platform expansion, and this risk is reflected in the diversity of valuations, explore the details and share your view.

Explore 10 other fair value estimates on Roku – why the stock might be worth 11% less than the current price!

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