Could Howdy’s Low Price Shift Roku’s (ROKU) Position in the Streaming Subscription Race?

• Earlier this month, Roku announced the launch of Howdy, its new ad-free subscription video-on-demand service priced at US$2.99 per month, offering thousands of hours of content from partners like Lionsgate, Warner Bros. Discovery, and FilmRise, as well as select Roku Originals.
• This move positions Roku to address demand for affordable, uninterrupted streaming with a nationwide service featuring a broad, recognizable content library.
• We’ll examine how the Howdy launch and its low pricing could shape Roku’s growth outlook and investment narrative moving forward.

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Roku Investment Narrative Recap

For someone considering Roku stock, the key thesis centers on belief in the long-term expansion of streaming and Roku’s ability to grow its active user base and recurring platform revenue. The launch of Howdy, Roku’s low-cost ad-free SVOD service, introduces a potential new revenue stream and could increase user engagement, but does not immediately offset the risks of intensifying competition or the company’s current dependency on advertising as a core driver of earnings and cash flow.

Of recent company announcements, Roku’s new partnership with Amazon Ads is especially relevant. By integrating enhanced audience targeting across 80 million US CTV households, Roku is reinforcing its value to advertisers and deepening its platform moat, an important catalyst given how increased high-margin advertising revenue supports both short-term performance and long-term profitability goals.

However, in contrast to promising product launches and partnerships, investors should be aware of the growing risk that stronger competitors like Amazon or Google…

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

Roku’s outlook points to $6.1 billion in revenue and $372.1 million in earnings by 2028. This relies on an annual revenue growth rate of 11.4% and an earnings increase of $433.6 million from the current earnings of -$61.5 million.

Uncover how Roku’s forecasts yield a $101.15 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members estimated Roku’s fair value between US$84.40 and US$156.81 across nine perspectives. While many see Roku’s future as tied to gains from digital ad budgets, a few highlight competitive threats that could challenge revenue growth, inviting you to compare these sharply differing views.

Explore 9 other fair value estimates on Roku – why the stock might be worth 7% less than the current price!

Build Your Own Roku Narrative

Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.

• A great starting point for your Roku research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free Roku research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate Roku’s overall financial health at a glance.

No Opportunity In Roku?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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