- If you are wondering whether Roku stock still offers value after its recent run, the numbers give you a useful starting point but not the full story.
- Roku shares last closed at US$127.98, with returns of 13.6% over 7 days, 30.3% over 30 days, 17.7% year to date and 113.7% over 1 year, while the 5 year return sits at a 58.5% decline.
- These moves have kept Roku in the spotlight, with investors paying close attention to how the business is positioning itself within the streaming and connected TV market. This broader context helps explain why sentiment has shifted at different points even as the long term share price record remains mixed.
- On Simply Wall St's valuation checks, Roku earns a value score of 2 out of 6. The next sections look at how different valuation methods assess the stock and set up a more detailed way to think about value by the end of the article.
Roku scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Roku Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model takes the cash a company is expected to generate in the future and discounts those projected cash flows back to today, producing an estimate of what the business could be worth right now.
For Roku, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The company’s last twelve months free cash flow is about $527.9 million. Analyst estimates and subsequent extrapolations by Simply Wall St project free cash flow rising to $1.7b in 2030, with a series of annual projections between 2026 and 2035 that are discounted back to today’s value.
Pulling these together, the DCF model arrives at an estimated intrinsic value of about $206.31 per share, compared with the recent share price of $127.98. That implies the stock is around 38.0% undervalued on this set of cash flow assumptions. This represents a meaningful gap for investors to weigh against the risks and…