Roku, Inc. (ROKU) Stock Valuation — PE Analysis
Entertainment · NASDAQ
Current Price
$145.42
PE Ratio (TTM)
106.8x
Intrinsic Value
$83.57
-74.0% margin of safety
COMPETITIVE MOAT
↑Dominant Streaming Platform Position
Roku holds a leading market share in the connected TV streaming device market. This scale creates a powerful network effect, attracting more users and content providers.
↑Extensive Content Ecosystem
The platform aggregates a vast library of streaming channels and apps, making it a convenient one-stop shop for consumers. This broad selection increases user stickiness.
↑Advertising Platform Scale
Roku's large user base and viewing data provide a valuable advertising platform. Advertisers are drawn to its reach and targeting capabilities, creating a virtuous cycle.
INVESTMENT RISKS
↓Intensifying Competition
The streaming market is highly competitive, with major tech players and content providers vying for market share. This could pressure Roku's user growth and pricing power.
↓Content Licensing and Distribution
Roku's reliance on content providers for app availability and its own content licensing agreements pose risks. Changes in these relationships could impact user experience and revenue.
↓Regulatory Scrutiny
As a dominant platform, Roku may face increased regulatory oversight concerning data privacy, antitrust issues, or content moderation. This could lead to compliance costs or operational restrictions.
Base case
ROKU base case PE valuation
At a current price of $145.42, the base case PE valuation puts ROKU fair value near $83.57 per share. That figure assumes 12.4% yearly earnings growth, a target PE multiple of 50x, and a 10% discount rate.
Intrinsic Value
$83.57
Margin of safety
-74.0%
Expected annual return
-10.5%
Base case assumptions: 12.4% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ROKU PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Roku, Inc. respond.
Open PE Calculator for ROKUCompany Overview
Roku, Inc., alongside its affiliated companies, operates a significant platform for television streaming. The enterprise is segmented into two primary areas: Platform and Player. Through its platform, users can effortlessly explore and access a vast selection of content, including films, television series, live broadcasts, news updates, sports events, and other forms of entertainment. As of December 31, 2021, Roku had garnered 60.1 million active user accounts. Beyond its core streaming service, Roku generates revenue from diverse offerings such as digital and video advertisements, content distribution, and the management of subscriptions and billing. The company also facilitates various e-commerce transactions and provides opportunities for brand sponsorship and promotions. Roku further diversifies its business by manufacturing, marketing, and licensing smart televisions under the "Roku TV" brand. Additionally, it offers a line of Roku-branded hardware, which includes streaming devices, audio equipment, and related accessories. A specific revenue stream comes from selling dedicated channel buttons that are integrated into the remote controls of its streaming gadgets. Roku distributes its comprehensive range of products and services through multiple channels: traditional retail outlets, specialized distributors, and directly to consumers via its official website. Its operational footprint extends across the United States, Canada, the United Kingdom, France, Mexico, Brazil, Chile, Peru, and broadly throughout both North and South America, as well as Europe. Roku, Inc. was founded in 2002 and is headquartered in San Jose, California.
Financial Metrics — ROKU PE Stock Valuation Data
PE Ratio (TTM)
106.8x
PEG Ratio
0.04
Earnings Yield
0.94%
ROE (TTM)
7.6%
Revenue/Share (TTM)
$33.66
Debt/Equity
0.19x
Frequently Asked Questions
What is the PE ratio of ROKU?
The trailing twelve-month PE ratio of ROKU reflects how much investors pay per dollar of Roku, Inc.'s earnings. This metric is most useful when compared to Entertainment peers and the company's own historical range.
Is ROKU overvalued based on PE ratio?
ROKU's PE of 106.8x combined with a PEG ratio of 0.04 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Entertainment, a DCF analysis may be more appropriate.
How do I value ROKU stock using PE ratio?
To value Roku, Inc. using PE: (1) Compare the current PE (106.8x) against the Entertainment median to assess relative pricing, (2) check the PEG ratio (0.04) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of ROKU?
ROKU's PEG ratio is 0.04, calculated by dividing the PE ratio (106.8x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for ROKU stock valuation?
PE ratio gives a quick relative read — how ROKU is priced versus Entertainment peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See ROKU DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Communication Services valuationsP/E and DCF value ROKU with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.