Key Points

• Roku reports its second-quarter numbers after Thursday's market close.

• A clear path to profitability, improving guidance, and rising partnership prospects can make it a strong performance.

• Roku stock has still initially stumbled after posting financial results -- more often than not -- over the past year.

• 10 stocks we like better than Roku ›

A lot of companies have a lot riding on impressing the market this earnings season. Roku (NASDAQ: ROKU) certainly has a lot to gain -- or lose -- depending on how its fresh financials play out. Shares of the TV video-streaming pioneer have more than doubled the market's return in 2025, and are up a hearty 53% over the past year.

Roku reports its second-quarter results on Thursday afternoon, shortly after the market close. Roku's guidance for the period calls for a net loss of $25 million, improving on the $34 million deficit it posted a year earlier. It sees revenue increasing 10.5% to $1.07 billion. Let's go over a few of the reasons why the shares can move higher on Friday following the telltale earnings release. Let's close with one reason why the reaction may not be so rosy.

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1. Profitability can come sooner than you think

A big knock on Roku has been its lack of profitability. It generated positive net income for a six-quarter stretch from the second half of 2020 to all of 2021, but it has remained in the red outside of that run. It's worth noting that Roku hit an all-time high during that span of time. The stock would have to be a five-bagger from today's starting line to get back there. What if Roku is closer to becoming profitable sooner rather than later?

Roku's guidance three months ago was encouraging. The niche leader sees a loss of $30 million for all of 2025. It already scored a net loss of $27 million for the first quarter. Its outlook calls for a $25 million deficit for the three months that ended in June. If it's still modeling a $30 million hole on the bottom line for the entire year, that would translate into a profit of $22 million for the next two quarters combined.

Will its new guidance show positive net income for the current quarter or will the burden to dig Roku out of the red rest solely on its fourth-quarter performance? What if profitability is already here? Back in February it was calling for a $40 million deficit for both the first quarter and all of 2025. It improved on both of those forecasts when it announced results at the start of May. After 13 consecutive quarters of losses, the bottom-line turnaround could be here.

2. Engagement could keep rising

Roku closed the curtain on two of its most popular metrics at the end of last year. It is no longer reporting the number of users on its free operating system. The move also meant the end to putting out average revenue per user (ARPU), as it would be easy math to calculate its audience if you divide platform revenue by ARPU. It's not just Roku doing this. The country's leading premium video service is also no longer putting out its subscriber count.

Thankfully Roku is still offering up the time that folks are spent streaming through the platform. Viewers spent 35.8 billion hours cradling the Roku remote during the second quarter, a nearly 17% year-over-year jump. Since Roku's flagship platform revenue is basically the ability to monetize its audience through ads and nudging viewers to try new services, the streaming hours metric has become even more critical. There are no signs that Roku's popularity is in trouble, and one can argue that extreme weather this summer has probably kept a lot of people at home in front of their TVs.

3. New partnerships can keep emerging

One of the most noteworthy things to happen during the second quarter was a partnership announced with Amazon. The leading online retailer operates a popular demand-side ad buying platform, and in mid-June it announced that it would start offering its advertisers a way to reach Roku's growing user base. The integration is a win-win deal for both parties, even if Amazon's Fire TV competes with Roku.

The fruits of that deal won't move the needle in the second quarter. The unexpected partnership won't be a factor until the latter half of this year. However, Roku will have a chance to discuss the partnership and how it can increase the ARPU that it is no longer reporting. This could also spur other partnerships as Roku establishes itself as the best way for advertisers to get noticed in the era of connected TV marketing. Roku is ready for its close-up as a growth stock again.

A reason to sell?

Take a closer look at the stock chart above. You'll see Roku moving higher with its 53% surge over the past 12 months. Now zoom in on the purple E circles that point out when it posted its past four quarterly results. The stock has moved lower after announcing fresh financial results three of those four times.

On the one hand, it's encouraging to see that Roku isn't just surviving but actually thriving after initially poorly received quarterly results. However, it could give an investor pause seeing how the market response hasn't been positive the day after Roku's financial updates.

Long-term investors don't have to worry about timing the market. It's also worth noting that the three positive catalysts noted could make this a winning Friday instead of a sinking one. Roku has a lot to prove this week. Stay close to see how it all unfolds.

Should you invest $1,000 in Roku right now?

Before you buy stock in Roku, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,075,791!*

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Rick Munarriz has positions in Roku. The Motley Fool has positions in and recommends Amazon and Roku. The Motley Fool has a disclosure policy.

Key Points

• This growth stock is up over 40-fold since 2015 and is still growing revenue at high rates.

• This e-commerce powerhouse operates in an environment where 85% of sales are still offline, giving it a long growth runway.

• This streaming stock could be at a turning point.

• 10 stocks we like better than Shopify ›

Building wealth in the stock market is not difficult. The biggest challenge is staying focused on the long-term potential of a business when market volatility strikes, as it inevitably will. As long as you invest in competitively positioned companies that have lots of room to expand over the long term, you're going to be successful.

As the markets hit new highs at the midway point of 2025, three Motley Fool contributors believe Shopify (NASDAQ: SHOP), MercadoLibre (NASDAQ: MELI), and Roku (NASDAQ: ROKU) can make solid additions to a long-term investor's portfolio. Here's why these stocks are poised to deliver outstanding returns.

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An excellent stock to invest in e-commerce growth

John Ballard (Shopify): Shopify has been an amazing performer for investors. The shares have rocketed from a split-adjusted share price of about $3 following its initial public offering in 2015 to around $120 today. But what makes Shopify a brilliant growth stock is that it is still growing revenue at over 20% annually, with potential to keep growing at high rates for a long time.

The company's main driver of growth is not subscriptions to its platform, but merchant solutions, such as payment processing, shipping solutions, and capital lending. Shopify has reported 20% or more quarterly revenue growth for the last two years, with merchant solutions now comprising 74% of the business.

Merchant solutions are a high-margin revenue stream for Shopify. Because of this, Shopify continues to invest in driving this side of the business. Over the last year, it doubled the number of markets for Shopify Payments. It is also launching free tools, such as TariffGuide.ai, which uses artificial intelligence to help merchants figure out how to reduce costs in their supply chain based on product details. Shopify's innovation is an advantage in building the go-to operating system for e-commerce.

Of course, merchant solutions only grow if businesses using Shopify's platform are selling more and generating payment fees. This incentivizes Shopify to help merchants succeed. This forms a sort of partnership between the company and its merchant customers, which ultimately benefits the company and shareholders.

E-commerce is a multitrillion-dollar market, yet the total value of transactions completed by a Shopify merchant in the last quarter was less than $75 billion, or $350 billion on an annual run-rate basis. The recent expansion of Shopify Payments to 16 new markets should help it further penetrate this opportunity to drive more growth. All signs point to Shopify growing substantially in the years to come.

Great performance, tons of opportunity

Jennifer Saibil (MercadoLibre): MercadoLibre is an e-commerce powerhouse serving Latin America, and it's demonstrating fantastic growth. Its population is underpenetrated in e-commerce, giving it a long growth runway. It also has a growing presence in financial services, and its wide-ranging businesses in areas that are still adopting technology mean it has years of growth ahead.

In the 2025 first quarter, revenue increased 64% (currency neutral) year over year. Gross merchandise volume (GMV) was up 40%, and total payment volume increased 72%. It's also highly profitable. Operating income increased 45% over last year with a 12.9% margin.

Although e-commerce is growing rapidly, physical stores still account for 85% of sales in the company's regions. As the leader in e-commerce, MercadoLibre has 5% of the total retail market, and it's helping to generate the shift over to digital shopping by improving its value proposition with speedy deliveries, an increased assortment, and more. It's working, and unique active buyers continue to increase, up 25% year over year to 67 million in the first quarter. Like Amazon, it's also monetizing its platform with a lucrative and growing advertising business.

The fintech business is younger and growing even faster. Monthly active users increased 31% year over year in the first quarter to 64 million, and the credit portfolio increased 74%. The large incumbent banks in Latin America still account for the vast majority of banking in the region, but MercadoLibre is capturing market share through offering easy-to-use digital services and high yields on accounts. It's also expanding its platform with new products and features, and it's planning to open a fully digital bank in Mexico and Argentina.

MercadoLibre stock is up 41% year to date, crushing the market. It's been especially attractive to investors this year since it has low exposure to tariffs, but it tends to beat the market at any time. With its well-run business and wide opportunities, it should continue to create shareholder value for the foreseeable future.

This streaming stock could be ready for a breakout

Jeremy Bowman (Roku): There's no doubt that Roku has struggled in recent years. The leading streaming distribution platform is still operating at a loss, even though streaming now has a larger share of viewing in the U.S. than broadcast and cable combined.

The stock has been a laggard as well since a pandemic surge led to a collapse, but it could finally be ready to turn the corner. First, Roku said it expected to report an operating profit on a generally accepted accounting principles (GAAP) basis in 2026, and the company's recent results continue to show it making progress toward that end. In the first quarter of 2025, the company reported revenue growth of 16% to $1.02 billion, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved 37% to $56 million.

Last month, Roku announced a new partnership with Amazon, integrating Roku's authenticated CTV footprint with Amazon's DSP (demand-side platform). The partnership gives Roku a new way to leverage its ad inventory and technology and neutralizes one of its closest competitors in streaming distribution.

Additionally, the recent earnings report from Netflix showed that there's still robust growth in the streaming sector if Roku can take advantage of it. Meanwhile, Alphabet also showed off solid growth in its earnings report with advertising growth at 10%.

Analysts are expecting 11% growth from Roku in the second quarter to $1.07 billion when it reports earnings in August. If the company can top that and take steps toward profitability, there's a lot of upside potential for the stock.

Should you invest $1,000 in Shopify right now?

Before you buy stock in Shopify, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Shopify wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,064,942!*

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*Stock Advisor returns as of July 21, 2025

Jennifer Saibil has positions in MercadoLibre. Jeremy Bowman has positions in Amazon, MercadoLibre, Netflix, Roku, and Shopify. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, MercadoLibre, Netflix, Roku, and Shopify. The Motley Fool has a disclosure policy.

Key Points

• Netflix and Roku are longtime streaming leaders with excellent prospects.

• Both companies should benefit as streaming viewing hours increase.

• They can deliver above-average returns over the next decade.

Streaming giants Netflix (NASDAQ: NFLX) and Roku (NASDAQ: ROKU) have a lot in common. The former was an early investor in the latter. They both dominate their respective niches in the streaming industry and have produced market-beating returns over the long term.

Here's one more thing Netflix and Roku have in common: excellent long-term prospects that could lead to substantial gains over the next decade. Here's the bull thesis for these market leaders.

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1. Netflix

Netflix has been firing on all cylinders thanks to its excellent financial results. In the first quarter, the company's revenue increased by 12.5% year over year to $10.5 billion. Netflix's earnings per share of $6.61 was up 25%, while its free cash flow came in at $2.7 billion, 24.5% higher than the year-ago period.

Netflix is posting strong financials despite mounting competition in the streaming industry, which some thought would eventually erode its market share. But as evidence of the strength of its brand power, the company recently increased its prices once again. Netflix's ability to thrive even as new streaming services keep popping up says a lot about its prospects.

Streaming still has significant room to grow as the switch from cable continues. The company estimates a $650 billion revenue opportunity, which dwarfs its trailing-12-month revenue of $40.2 billion.

Over the next decade, it could make significant headway into this enormous, untapped potential. If Netflix can grab 10% of its total addressable market, its top line should grow at a good clip through 2035. The company's strategy to achieve that feat should remain the same: Create content that viewers love to watch and that spreads through word of mouth, leading to more paid subscribers on its platform, more data to help guide content production, and even better content.

A wonderful network effect has powered Netflix's success for a while now. There will be some challenges, including more competition and economic issues that might make people hesitant to put up with its price hikes, among others. However, Netflix has consistently demonstrated its ability to perform well despite these challenges, and I expect the company to continue doing so over the next decade.

The stock is still worth buying after the impressive run it has had over the past year. With $5,000, investors can afford three of the company's shares.

2. Roku

Roku's platform enables people to access most of the major streaming services, making the company's ecosystem an attractive hub for advertisers to target consumers. That's how Roku makes the lion's share of its revenue. Although it has encountered some headwinds in recent years -- including a slowdown in ad spending and declining average revenue per user (ARPU) -- Roku has somewhat recovered over the trailing-12-month period.

In the first quarter, the company's revenue increased by 16% year over year to approximately $1 billion. Roku's streaming hours were 35.8 billion, 5.1 billion more than the year-ago period. However, Roku remains unprofitable, although it is also making progress on the bottom line. The streaming leader's net loss per share in the period came in at $0.19, much better than the $0.35 reported in the prior-year quarter.

Although long-term investors may be concerned about the persistent red ink on the bottom line, recent developments show why Roku is a promising stock to hold onto. The company signed a partnership with Amazon, another leader in the connected TV (CTV) space. The two will grant advertisers access to their combined audiences, comprising 80 million households in the U.S. and more than 80% of the CTV market, through Amazon's demand-side ad platform.

This initiative will give advertisers far more bang for their buck, as early tests of the integration show. It also highlights the value of Roku's ecosystem, the leading one in the CTV space in North America. Over time, the company's platform will attract more advertising dollars, especially as streaming viewing time continues to increase. That's why investors should look past the red ink, for now. Roku's long-term prospects remain intact.

Even its ARPU decline in recent quarters was due to its focus on expanding its audience in certain international markets; it is still early in its monetization efforts in those regions. As Roku's initiatives in these places ramp up, while the company continues to make headway in more mature markets, Roku should eventually become profitable and deliver strong returns along the way.

The stock is worth investing in today for the next decade, and $5,000 is good for 56 shares of the company with some spare change.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Prosper Junior Bakiny has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Netflix, and Roku. The Motley Fool has a disclosure policy.

There are multiple reasons to believe that stocks are overvalued right now, generally speaking, motivating me to move on from some old duds in my portfolio.

For starters, consider the market for initial public offerings (IPOs). Companies usually wait to go public until market conditions heat up. High stock valuations allow IPO companies to raise more money. After below-average IPO years in 2022, 2023, and 2024, this year is shaping up to be above-average for new listings.

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The rise in IPO stocks in 2025 suggests that stock market valuations are high. And this suggestion can be corroborated further. According to YCharts, the price-to-earnings (P/E) ratio for the S&P 500 is 28, well above its 10-year average of 25.

S&P 500 P/E Ratio data by YCharts

Some investors may use this information to "time the market," selling all of their stocks. I believe that's the wrong takeaway -- there's no telling what will happen with the market next. But for me, I have stocks in my portfolio that I'd like to move on from. In my view, now is as good a time as any to sell these, considering the stock market is potentially overvalued.

I recently gave connected-TV platform company Roku (NASDAQ: ROKU) a hard look. I started buying shares in 2020 and continued buying into 2022. My entire position is down about 15% as of this writing, even though the S&P 500 has risen dramatically during my holding period. But I ultimately decided to keep holding for one key reason.

It's early. But so far, I'm happy with my choice. On June 16, Roku secured a deal with Amazon (NASDAQ: AMZN). And it underscores why I still haven't sold Roku stock yet.

Why Roku's potential is sky-high

For eight consecutive quarters, Roku has sold its hardware devices at a gross loss -- it sells them for less than it costs to make them. It does this because it's more interested in taking market share and becoming an advertising-technology (adtech) titan in connected TV (CTV).

When it comes to adtech, TV screens are the most desirable advertising medium, and Roku powers TVs in over 90 million households. Not only is the video format attractive to advertisers, but Roku has an interesting value proposition: It can "close the loop" in advertising.

Over the years, Roku has struck some interesting partnerships with companies such as Kroger, Walmart, and Cox Automotive. Take the Cox Automotive partnership for illustration. It owns the popular Kelley Blue Book platform. Through the partnership, Roku can show marketers how viewers are really responding to vehicle ads. If they see an ad and then head over to Kelley Blue Book for better info, that's an important data point for advertisers.

In this scenario, Roku and Cox Automotive work together to close the loop as much as possible.

Roku's partnerships with Kroger and Walmart can do similar things. Consumer brands could advertise on Roku, know who saw an ad, and know whether they bought anything at Kroger or Walmart as a result. Assuming Roku can demonstrate a high return on advertising spending, demand for its platform should soar, allowing it to command better advertising rates.

Will Roku finally be able to capitalize?

Now Roku is partnering with Amazon, and the potential is similar. Amazon is the largest e-commerce company in the world and perhaps knows more about consumers than any other retailer. This makes Amazon's advertising solutions quite popular and explains how its ads business scaled so quickly.

Through the new partnership, Roku and Amazon hope to deliver a win-win. It's a potential win for Roku because advertisers will have data from Amazon and can better target Roku's viewers. It's a potential win for Amazon also because (in spite of investors' concerns about Amazon's Fire TV) Roku remains the top player in the space.

In short, I believe Roku's partnership with Amazon is big news for investors, and it's exactly the kind of news that's kept me as a shareholder. But allow me to contextualize the news a little more.

Roku's potential has been sky-high, but it has, nevertheless, been a disappointment in recent years.

Roku generated higher average revenue per user (APRU) in 2022 than it did in 2024. And management doesn't even break out this metric anymore, suggesting the numbers are still disappointing. But viewership has increased dramatically. This alone should have lifted ARPU. The only logical explanation is that advertising demand simply hasn't grown as it should, in spite of what Roku's adtech capabilities can theoretically provide.

Roku's partnership with Amazon is expected to officially launch before the end of the year. If the partnership can't materially improve Roku's monetization at some point in 2026, then I don't know what will. Failure to see a substantial improvement with Roku at some point in 2026 could suggest it's finally time to move on from this once-promising stock.

Should you invest $1,000 in Roku right now?

Before you buy stock in Roku, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 23, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jon Quast has positions in Roku. The Motley Fool has positions in and recommends Amazon, Roku, and Walmart. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.

It's been quite the week for Roku (NASDAQ: ROKU) and its shareholders. The country's leader in getting folks streaming from their TVs kicked off the fireworks by announcing a transformative deal with Amazon (NASDAQ: AMZN) on Monday. An analyst upgrade and a pair of other firms jacking up their price targets followed.

The stock is up nearly 10% heading into the final trading day of the week. Roku is a name that has fallen off of many growth investing radars, but the shares are now up 55% over the past year. With its solid growth, continuing niche dominance, and projected return to profitability for the second half of this year, it's a name you should probably start paying attention to again.

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At its frenzied peak in 2021, a $5,000 investment could barely be exchanged for 10 shares. That same $5,000 today could have you walking away with 60 shares. This is the kind of math that can burn investors if they're buying a falling stock with dim prospects, but today's Roku is in much better shape than it was four years ago.

Betting on the stream weaver

Roku's revenue and time spent on its platform have both nearly doubled since the shares peaked six times higher four summers ago. However, just saying that Roku is a larger company than it was back in 2021 isn't enough to convince you that this is the smartest growth stock for your next investment. Roku's success in continuing to gain market share as North America's leading streaming operating system for TVs will continue to open doors; doors like the one that was slammed off its hinges on Monday with its new partnership with Amazon.

The leading online retailer runs a popular programmatic demand-side ad buying platform, and this week it turned heads by striking an integration deal with Roku. The two companies are typically competitors in the streaming space; Roku's platform competes with Amazon's Fire TV. But despite the wide gap in market cap -- Roku at $12 million and Amazon at $2.3 billion -- the online retailer doesn't attract the same captive U.S. audience as the pioneer.

In the spirit of the "if you can't beat 'em, join 'em" adage, Amazon advertisers will now have access to Roku's massive reach of roughly 80 million U.S. households spending an average of more than four hours a day cradling the Roku remote. The early tests were fruitful. Amazon found that teaming up with Roku would deliver its connected TV clients 40% more unique viewers with the same budget. With better ad targeting and the ability to lower the instances of viewers seeing the same ads repeatedly, Amazon points out that its advertisers can generate a lot more value on Roku through this partnership.

Investors got excited about Roku's prospects following the news ahead of Monday's market open. A few analysts took the baton and ran with it later in the week.

Spreading the news

Analyst Alan Gould at Loop Capital upgraded his opinion on Roku from hold to buy, boosting his price target from $80 to $100 in the process. He feels that the partnership will have a positive impact on Roku's results starting next year, making this now a good time to hop off the fence. The combination of Amazon's shopping feedback loop for advertisers and Roku's market leadership as a streaming hub make this a bar-raising collaboration.

A couple of other firms juiced up their price targets without changing their opinions. BofA was already bullish, but it bumped its price goal from $85 to match Loop Capital at $100. Citigroup remains neutral, but it still revised its target on the stock from $68 to $84.

Roku was already on the way to tear down bearish knocks on the stock. Its lack of profitability has been a popular pressure point, but its guidance in May called for a net loss of $30 million for all of 2025.

Why is this important? Well, Roku clocked in with a bottom-line deficit of $27 million for the first quarter, targeting a loss of $25 million for the current one. A $30 million loss projection for the year after a $52 million hole through the first six months translates into a profit of $22 million over the course of the next six months. Roku was already generating positive free cash flow and adjusted earnings before interest, taxes, depreciations, and amortization (EBITDA). Now it's about to scratch a reversal in net income from its bucket list.

All roads lead to Roku these days. More households are turning to Roku to fuel their smart TV streaming needs, and advertisers are doing the same. Roku shares are already bouncing back, but the best is yet to come.

Should you invest $1,000 in Roku right now?

Before you buy stock in Roku, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Citigroup is an advertising partner of Motley Fool Money. Rick Munarriz has positions in Roku. The Motley Fool has positions in and recommends Amazon and Roku. The Motley Fool has a disclosure policy.

Although the market has been bouncing back in the past couple months and approaching its previous all-time high, not all companies are riding the wave. As of June 6, this growth stock is trading an eye-watering 84% below its peak, a record mark that was established in July 2021. At this point, maybe it's too hard to ignore the dip.

Should you buy shares in June and hold them for the next 20 years? Here are some important variables to think about.

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Riding two secular trends

The internet has helped to reshape industries, corporate strategy, and consumer behavior. This is evident in the rise of streaming entertainment. It also reveals itself when you look at the digital advertising market.

The business that benefits from both of these secular trends is Roku (NASDAQ: ROKU). It provides users with a single platform that allows them to aggregate all their content. At a time when it seems there's an unlimited number of streaming apps out there, it's extremely valuable to have them all in one place. As such, Roku has top market share among smart TV operating systems in the U.S., Mexico, and Canada. A whopping 40% of new TVs sold in the U.S. during the first quarter came equipped with Roku software.

You couldn't tell by the stock's weak performance, but this company continues to post double-digit growth. Revenue increased 16% in Q1 (ended March 31). This was after the top line expanded by 18% in 2024. At the end of last year, Roku counted 89.8 million memberships, although it has stopped reporting this key metric.

It's worth highlighting that 86% of the company's sales in the first quarter of 2025 came from its platform segment, which makes money partly from advertising. "With more than half of U.S. broadband households and our expanding ad product offering, we provide marketers the reach and visual impact of traditional TV with the performance of digital advertising," the latest shareholder letter reads.

Understanding the financial situation

In 2021, Roku generated $242 million in net income. That was a great year, but it was an anomaly. Roku has consistently reported net losses, to the tune of a cumulative $866 million in the past nine quarters. This could change, though, due to expense controls.

The leadership team expects to post positive operating income in 2026. As a scaled internet-enabled enterprise, Roku should be able to grow the bottom line as it scales up and increases revenue. Investors should pay close attention.

Roku had its initial public offering in 2017. So I can certainly understand the critical viewpoint; if the business hasn't yet become consistently profitable, then maybe it won't happen anytime soon. In other words, we could be looking at the true nature of the company's financial situation.

It helps that the company has a clean balance sheet. As of March 31, Roku had $2.3 billion in cash and cash equivalents. On the other hand, it had zero debt. This reduces the chance it runs into financial troubles.

Valuation, risk, and time horizon

Because the stock has gotten crushed, the valuation is compelling. Shares trade at a price-to-sales ratio of 2.7. This is 69% below the stock's historical average. The current setup demonstrates just how much investors have soured on the business.

That valuation is attractive, no doubt. And I think it makes up for what I view as an important risk.

Investors can't ignore the competitive landscape. Big tech giants Alphabet, Amazon, and Apple all offer their own streaming apps and media hardware devices, putting them all head-to-head against Roku. This just means that Roku will have to remain focused on doing what's best strategically for its viewers and for its ad partners. So far, though, it has held its own in the industry.

It's difficult to say ahead of time that you should own a stock for 20 years. That's very far out into the future. However, Roku has the necessary ingredients to be a big winner. It has a cheap valuation, leading industry position, and meaningful growth potential. I believe investors who have a long time horizon should take a closer look at buying the stock.

Should you invest $1,000 in Roku right now?

Before you buy stock in Roku, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Roku. The Motley Fool has a disclosure policy.

At first glance, Roku (NASDAQ: ROKU) looks like a terrible investment. Earnings are negative. Sales are rising, but much more slowly than they were four years ago. The stock trades at an unaffordable valuation of 125 times forward earnings estimates. After a long-forgotten price spike in the pandemic lockdown era, Roku's stock fell hard and then traded sideways over the last three years.

But if you look a bit closer, you should see a healthy long-term growth story in play. Roku targets a huge global market, following in the footsteps of proven winners, and the stock doesn't appear expensive at all from other perspectives.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

It's actually one of my favorite stocks to buy in 2025, and Roku should be a helpful addition to long-term portfolios.

Breaking down common concerns about Roku stock

Let me deconstruct the scary qualities I mentioned above.

Negative earnings

Roku's red-ink earnings are at least partly a voluntary choice. The company treats its streaming hardware as a marketing tool, selling Roku sticks and TV sets below the manufacturing and distribution costs. This user-growth tactic is especially unprofitable in Roku's highest-volume sales periods. The holiday quarter of 2024, for example, nearly quadrupled the devices segment's negative gross margin from 7.6% in the third quarter to 28.6% in the fourth.

In other words, Roku is running its business with unprofitable profit margins to maximize its market reach and user growth. Furthermore, I'm talking about generally accepted accounting principles (GAAP), which is the standard accounting method used for calculating taxes. Roku often posts negative GAAP earnings that result in tax refunds rather than expenses.

At the same time, free cash flows tend to land on the positive side with modest cash profits. That's just efficient accounting powered by stock-based compensation and amortization of Roku's media-streaming content library.

Slowing sales growth

Roku's year-over-year sales growth has averaged 14.7% over the last two years. That's a sharp retreat from 40.9% in the three years before that. But don't forget that the extreme growth was driven by the COVID-19 pandemic.

Lots of people turned to digital media during the lockdown period, resulting in a unique business spike for companies like Roku and Netflix (NASDAQ: NFLX). The pandemic also happened to take place just months after Walt Disney (NYSE: DIS) launched the Disney+ streaming service, inspiring a torrent of copycat service launches. Long story short, there may never be a media market like the one in 2020-2021 again. Holding on to nearly half of that nitro-boosted growth rate in recent years is actually really good.

Sky-high valuation

Let me point back to the voluntary GAAP losses. Roku isn't trying to generate huge taxable profits at this time, which makes price-to-earnings (P/E) ratios largely unusable. Even the forward-looking version of this common metric relies on Roku's guidance targets filtered through Wall Street's analysis. If anything, the analyst community's projections are more optimistic than Roku's official targets. Management expects a $30 million GAAP loss in fiscal year 2025, which would work out to another "not applicable" P/E ratio.

If you look at other valuation metrics, Roku starts to look like a bargain. Trading at 2.6 times trailing sales, the stock is comparable to slow-growth giants such as Caterpillar or Unilever. Roku also seems undervalued, if you base your analysis on its robust balance sheet, with a price-to-book ratio of 4.4 and a price-to-cash multiple of 4.9.

The stock seems stuck

I'll admit that Roku's stalled stock chart can be frustrating. Share prices are down 17% over the last three years, missing out on 44% growth in the S&P 500 (SNPINDEX: ^GSPC) market index. Roku's sales are up 45% over this period, while free cash flow rose by 66%. When will the big payoff come, rewarding patient shareholders for Roku's quiet success?

That's OK, though. Keeping stock prices low just gives investors more time to build those Roku positions. I have bought Roku more often than any other stock since the spring of 2022, and I might not be done adding shares yet. Whenever I have spare cash ready for investments, Roku pops up as a top idea. That remains true in June 2025. So, let the chart slouch lower. Affordable buy-in prices can set you up for tremendous long-term returns.

Should you invest $1,000 in Roku right now?

Before you buy stock in Roku, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Anders Bylund has positions in Netflix, Roku, and Walt Disney. The Motley Fool has positions in and recommends Netflix, Roku, and Walt Disney. The Motley Fool recommends Unilever. The Motley Fool has a disclosure policy.

The last couple weeks of springtime have seen the market itself spring to life. There are investing opportunities in both stocks that have fallen out of favor and some popular growth stocks.

Some of my favorite stocks right now are Sirius XM Holdings (NASDAQ: SIRI), Nintendo (OTC: NTDOY), and Roku (NASDAQ: ROKU). They are well positioned to keep rising from here, armed with some obvious and some not-so-obvious bullish catalysts. Let's take a look.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Sirius XM Holdings

Don't let the weak stock chart facade dissuade you from taking a closer look at the country's satellite radio monopoly. Sirius XM stock was cut in half last year, and it still hasn't bounced back in 2025. There are some solid reasons for the media stock's meandering ways, but there are also a compelling valuation, chunky yield, and potential tailwinds to consider.

Let's start with the negatives. It's been more than a decade since Sirius XM posted double-digit top-line growth, and revenue is now declining slightly for the third year in a row. Auto sales are the funnel that leads to new subscriptions, and that market has been weak. Young drivers are also turning to streaming smartphone apps for in-car entertainment, bypassing Sirius XM's premium offering. If this looks pretty bleak, turn the corner. Sirius XM may be about to do exactly that a lot sooner than the market thinks.

It was easy to see why Sirius XM was struggling coming out of the pandemic. Folks were working from home, so it was easy to justify sidestepping in-car subscriptions for a product that eases daily commutes. This is starting to change, with more and more companies calling employees back to the office. Gas prices are low, down 12% across the country over the past year and 22% lower than they were three years ago. This should be an incentive to get folks driving more, increasing the value proposition of coast-to-coast coverage of Sirius XM's premium content. Meanwhile, if financing rates start to ease up and the economic outlook improves, there's going to be a lot of pent-up demand for new vehicle sales with factory-installed Sirius XM satellite receivers.

The valuation is better than you might think for a company on the cusp of turning things around. You can buy Sirius XM stock for less than 8 times this year's projected earnings. If the recovery takes some time, it literally pays to be patient. The stock's 4.9% yield is a lot better than both the market average and what sideline sitters are generating in money market yields.

Don't take it from me, though. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has boosted its stake three times since the fall of last year. Warren Buffett's holding company now owns more than a third of Sirius XM. I'm happy to own a much smaller chunk of the company.

2. Nintendo

Let's play a different game with this one. Nintendo isn't out of favor like Sirius XM. Shares of the Japanese video game pioneer hit another all-time high this month. The market is buzzing about next week's rollout of the Switch 2, Nintendo's first new gaming system in more than eight years.

This is a pretty big deal. Revenue and earnings for Nintendo tend to triple if not quadruple in the three to four years after a major new console comes out. The business itself is already well ahead of where Nintendo was when the original Switch hit the market in March of 2017. Nintendo's multigenerational appeal continues to widen. Nintendo has successfully jump-started its presence as a theatrical property, and it now has a presence with a dedicated land in three of the world's largest theme parks. Nintendo is richly priced based on recent financials, but the future is what is fueling renewed interest here. With demand for Switch 2 outstripping supply, the next couple of years should treat investors to stellar growth.

3. Roku

There's no sugarcoating the ugly multiyear stock chart here. Roku shares are trading 85% lower than their peak in the summer of 2021. That doesn't mean that Roku isn't in a much better place now. The company behind North America's leading operating system for TV streaming has never entertained an audience this large with engagement levels perpetually rising.

The 16% revenue growth it posted in its latest results extends its streak of double-digit gains to eight quarters. Losses continue to narrow, and Roku is forecasting a return to profitability in the second half of this year. With time spent on the platform having risen 16% over the past year, it has a firm hold on its viewers, who spend hours a day channeling their TV consumption through Roku's landing page. Its guidance for the second quarter did come in a bit light, but it's still stretched its streak of double-digit revenue growth to nine quarters.

Should you invest $1,000 in Sirius XM right now?

Before you buy stock in Sirius XM, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sirius XM wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Rick Munarriz has positions in Nintendo, Roku, and Sirius XM. The Motley Fool has positions in and recommends Berkshire Hathaway and Roku. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.

2025 has been an eventful year on Wall Street. The market has been making wild moves in response to unpredictable events. Many market watchers expect a downturn, a recession, and/or another bear market to emerge any day now. Then again, they've already been looking for these negative outcomes for several months.

There was a sharp drop in early April, but it didn't really stick. Whether you call the current situation a bear market or not, it's certainly a period of huge volatility.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

I understand if you've sworn off investing altogether amid these shifting economic conditions However, I've been putting more spare cash to work than usual in recent months -- and I plan to continue doing so. Let me explain why I'm an unusually active stock investor in this fickle market. By the time I'm done, you just might want to join me.

Timing the market is an impossible game

Nobody knows what the stock market will do tomorrow, or next week, or next year.

There are surprises around every corner. Nobody expected the COVID-19 pandemic. The artificial intelligence (AI) surge was another surprise. The shocking dot-com boom was followed by an equally unexpected crash. I could go on and on.

The point is, real-world events have profound and unpredictable effects on the stock market. Some shocks beget golden eras for specific industries. Others can lay a muffling blanket over the whole economy.

So I don't trust anyone who says they know what the market will do over a specific period. Even master investor Warren Buffett can't forecast Wall Street's next moves.

"Let me be clear on one point: I can't predict the short-term movements of the stock market," Buffett said in a 2008 New York Times article. "I haven't the faintest idea as to whether stocks will be higher or lower a month or a year from now."

If Buffett doesn't know, I don't stand a chance of getting it right. It's not for me to forecast when the next market downturn will start, or how deep it might go. Trying to time my stock purchases for the absolute bottom of a potential trough is a bad idea.

Time in the market is a winning strategy

That 2008 Buffett article didn't end on that gloomy note, of course. He went on to describe his contrarian investment style, and his focus on holding great stocks for a long time.

"Be fearful when others are greedy, and be greedy when others are fearful," he wrote. Yeah, you've heard that bit before. "Bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price."

In the long run, great companies will make patient shareholders happy. If you're not comfortable with picking the best stocks in a crowded market, a diversified mutual fund or exchange-traded fund (ETF) will do the same job.

For example, the Vanguard S&P 500 ETF (NYSEMKT: VOO) will never beat the market. However, it will help you build up your wealth if you invest in it steadily over many years and decades.

So I won't nail the perfect time to buy -- but at least I'm trying

Math is a wonderful science. I'm particularly thrilled about the power of compound growth.

Earning annual returns of 10% on your investments for a decade won't just double your money, because you're not just experiencing those 10% gains on your portfolio's original value. In the second year, you'll also see a 10% gain on the first year's gains, and so on in every year that follows. The benefits really start to rack up over time. In this basic example, If you started with a $1,000 investment, after 10 years, your investment would be worth $2,594.

Longer investment periods will continue to boost the overall returns. Add another decade to that $1,000 thought experiment with perfect annual returns of 10%, and you'd have $6,727 at the end. Going to 30 years results in a $17,449 result.

In reality, your gains won't be smooth. You'll go through down years like 2022 and fantastic periods like 2024. Adding more cash to your portfolio is a great idea when the market is booming. Yet as Warren Buffett suggests, you can get more value for your investing dollar when stock charts are trending down.

What I'm buying in 2025

That's why I don't mind buying stocks and exchange-traded funds in this nerve-wracking economy. My most recent buys have included the Vanguard S&P 500 ETF and the more aggressive Vanguard Russell 1000 Growth (NASDAQ: VONG) ETF. Among my hand-picked stock buys in recent weeks, you'll find a few shares of retail giant Walmart (NYSE: WMT) and media-streaming pioneer Roku (NASDAQ: ROKU). These are some of my best investment ideas right now.

It feels easy to find undervalued stocks right now. I've only shared a few of my 2025 purchases here. Most of them have posted negative returns in the early going, and that's fine. I might just keep buying them at better and better starting prices.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

Before you buy stock in Vanguard S&P 500 ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $617,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $719,371!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Anders Bylund has positions in Roku, Vanguard S&P 500 ETF, Vanguard Scottsdale Funds-Vanguard Russell 1000 Growth ETF, and Walmart. The Motley Fool has positions in and recommends Roku, Vanguard S&P 500 ETF, and Walmart. The Motley Fool has a disclosure policy.

Stocks are starting to bounce back, and it's probably a good time to take a look at growth stocks that can make the most of the market's recent bullish turn. You probably have a few growth stocks in mind, and I want to share some of mine.

I think Amazon (NASDAQ: AMZN), Roku (NASDAQ: ROKU), and Celsius Holdings (NASDAQ: CELH) are three growth stocks ready to roll in the final seven months of 2025 and beyond. Let's take a closer look at these three potential market beaters.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Amazon

The leading online retailer has been a generational growth stock. Amazon has posted top-line growth of at least 9% in each of its first 28 years of trading. It's also almost a 2,000-bagger since going public in May of 1997.

Growth has slowed. Net sales rose 9% to $155.7 billion in the latest quarter it reported last week, but that's above the 5% to 8% it was targeting three months earlier.

The bottom line is the bigger story here. Net income shot 64% higher to $17.1 billion. Sales growth has meandered lately, but Amazon broke through with its first quarter of double-digit net margin in the holiday quarter of 2024. That margin has only widened in the subsequent quarter.

Amazon has posted double-digit percentage earnings beats in each of its last four quarterly updates, and its guidance is also encouraging. It sees net sales climbing 7% to 11% in the current quarter, a larger jump than it was modeling in the first quarter.

There are tariff concerns, but it may be more of an opportunity than a challenge. The surge in prices on imported goods is leaving a bigger dent on deep discounters Shein, Temu, and other Chinese e-tailers trying to sell to American consumers. These companies were previously gaining market share at Amazon's expense with their low prices.

Amazon also has its AWS cloud computing infrastructure platform, which is gaining market share to the point where it now accounts for nearly a third of the global market. It's just 15% of the revenue mix here but is growing faster than its flagship e-commerce business.

The stock may not seem cheap, but here's the thing: Amazon may be a card-carrying member of the ballyhooed "Magnificent Seven," but it's trading essentially where it was at this time last year. Buying Amazon for 31 times this year's projected earnings and 26 times next year's target may seem rich, but the profit multiple is near its historic low.

2. Roku

3. Celsius Holdings

One can argue that Celsius is not worthy of being considered a growth stock at this point. After three consecutive years of revenue more than doubling, last year treated investors to a mere 3% advance.

The top line actually declined in the second half of 2024. Even the stock has lost more than half of its value over the past year, even though it's bouncing back in a major way in 2025.

Its namesake beverages continue to be a functional energy-drink staple. It also garnered bullish attention earlier this year by announcing plans to acquire the company behind Alani Nu, opening fresh opportunities with a lifestyle brand catering to a different target audience at an accretive price. With the company's return to growth expected in the second quarter -- and its stock trading for less than 30 times next year's earnings estimates -- it could wind up being one of this year's best-performing stocks.

You won't have to wait long for a fresh take on Celsius. The rebounding sparkling-beverage company reports first-quarter results on Tuesday morning.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $296,928!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,933!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $623,685!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of May 5, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rick Munarriz has positions in Celsius and Roku. The Motley Fool has positions in and recommends Amazon, Celsius, and Roku. The Motley Fool has a disclosure policy.

Media-streaming technology innovator Roku (NASDAQ: ROKU) is always riding a roller coaster down Wall Street. As of April 23, the stock is trading 36% below its annual peak and 87% down from the all-time highs in the summer of 2021.

But Roku's high-octane growth story is still playing out. The company sacrificed some profits to boost its market reach and sales growth in recent years, and many investors focused on the swooning bottom line instead of the accelerating revenue trend. As a result, Roku's stock now trades at a ridiculously low valuation and I highly recommend buying a few shares in April 2025.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Roku's value-stock valuation neighbors

So here's the deal. Roku's stock is changing hands at 2.2 times trailing sales. That's an appropriate valuation for mature, slow-growing businesses. For example, The Home Depot (NYSE: HD) carries the same 2.2 price-to-sales (P/S) ratio and Starbucks (NASDAQ: SBUX) hovers just above this unlikely duo with a P/S ratio of 2.6.

Starbucks and Home Depot are perfectly respectable companies. They're great investments in their own right, in large part thanks to their generous dividend policies. Investors expect these retail giants to generate massive cash profits, most of which are distributed to shareholders in the form of buybacks and dividends. Sales growth isn't terribly important in this scenario. It's all about bottom-line profits.

Not your barista's growth trajectory

But Roku isn't running that type of business yet. It could get there in a decade or two, but this company is maximizing its revenue growth and global market reach right now. There was a slowdown in the inflation crisis of 2022, but that's ancient history already. Roku is growing its business much faster than Starbucks and Home Depot:

ROKU Revenue (TTM) data by YCharts

Roku's profit-sapping business growth methods

Roku's impressive sales growth was built on some temporarily painful policies. The company boosted its research and development (R&D) budgets throughout the difficult post-lockdown and high-inflation periods. Did it slow down on sales and marketing efforts? Nope, those budgets rose just as quickly as the R&D spending. At the same time, gross margins headed lower because Roku sold its media players at very low prices in order to win some price-sensitive customers.

Things have changed since then. Roku is pursuing international markets while building its presence in the video-based digital advertising sector. This isn't the most inspiring economy ever for advertising experts, with unpredictable government policies and low consumer confidence, so it could take some time before Roku's ad business starts pulling its weight.

Smart ways to buy a roller-coaster stock like Roku

That's alright, though. I showed you that Roku's revenue growth is accelerating right now. The company's robust American business forms a rock-solid platform from which it can explore opportunities abroad, much like former parent company Netflix (NASDAQ: NFLX) did in the 2010 to 2015 era. I can't promise that Roku will earn a trillion-dollar market cap any time soon, as Netflix hopes to do, but the stock looks incredibly undervalued at today's tiny valuation ratios.

So Roku checks all the boxes for a promising long-term growth investment. It's an exciting growth stock (check!) in a booming global market (check!), trading at bargain-bin prices (check!).

Volatility comes with the territory, and you might want to blunt the price risk by spreading out your Roku investment over time. Buying in thirds is one reasonable approach, or you could make a deeper commitment by setting up a dollar-cost averaging plan. The more you can automate these moves, the better.

And keep an eye on that P/S ratio. Roku's stock doesn't belong in the same value-investing conversation as Home Depot and Starbucks in the long run. Netflix is a more reasonable peer, currently trading at 11 times sales.

Should you invest $1,000 in Roku right now?

Before you buy stock in Roku, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 869% — a market-crushing outperformance compared to 159% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Anders Bylund has positions in Netflix and Roku. The Motley Fool has positions in and recommends Home Depot, Netflix, Roku, and Starbucks. The Motley Fool has a disclosure policy.

Roku might be known for its streaming sticks and smart TVs, but the brand also has a strong presence in the smart home market. From video doorbells and smart lights to plugs and motion sensors, Roku’s smart home catalog is surprisingly robust. The catalog is set to expand in the coming months, as Roku has […]

With the return of market volatility, anxiety levels are rising for retirement savers, but if you're not going to be tapping into your savings for many years, there's no reason to worry. Stock market dips are historically the best time to invest, because lower share prices allow you to gain more of a company's earnings, which leads to great returns when the markets recover.

To help you in your search for undervalued growth stocks, here are two excellent candidates.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Meta Platforms

Meta Platforms (NASDAQ: META) is coming off a year of strong growth as it continued to invest in artificial intelligence (AI) to bring more personalization to its social media platforms. The company is set for strong growth yet trades at a reasonable 24 times earnings.

Meta Platforms spends billions on technology every year to support the growth of its apps, and importantly, AI. More than 700 million monthly active users have tried its Meta AI assistant, and management expects that number to grow to 1 billion in 2025.

Meta AI is quickly scaling into one of the most used AI assistants. The growing adoption highlights the advantage the company has with more than 3.3 billion people using its services every day across Facebook, Instagram, WhatsApp, Messenger, and Threads.

This large user base drives substantial advertising revenues. Last year, Meta Platforms earned $62 billion of net income on $164 billion of revenue, with the top line growing 22%. Other than Meta AI, the company also offers professional AI tools that improve ad targeting across its family of apps, which is benefiting the business. Over the long term, Meta could discover new revenue streams from offering premium AI services that pads the company's bottom line.

Analysts expect Meta to deliver 16% annualized earnings growth in the coming years. While no one has a crystal ball for the stock in the near term, investors that buy shares today should see returns that roughly follow the underlying growth of the business from here.

2. The Trade Desk

The Trade Desk (NASDAQ: TTD) is a leading digital ad-buying platform that is benefiting from the growth in digital advertising -- a market valued at $800 billion and growing.

A small revenue miss compared to expectations last quarter sent the stock plummeting, but nothing has changed the company's competitive position or long-term opportunity, which means investors have a great opportunity to buy shares on the cheap.

Ad agencies and brands love The Trade Desk because it offers a wide range of ad inventory, and it offers the technology to make profitable ad-buying decisions. For example, its Kokai AI platform can quickly sort through millions of ad impressions every second to help advertisers find the right deal. Better pricing, targeting, and ad performance is helping The Trade Desk gain more clients.

The Trade Desk generates revenue by charging a fee of the total amount its customers spend on ads and other services. Revenue grew 26% to $2.4 billion in 2024, and the business earned a healthy profit margin of 16%.

Connected TV continues to be one of biggest opportunities, where The Trade Desk has valuable partnerships with Roku and Disney. The connected TV ad market is estimated to reach $46 billion by 2026, according to Statista, providing tremendous upside for the company.

Revenue is expected to grow 18% this year, yet the stock is trading at its lowest valuation in years. Analysts expect earnings to reach $3.89 by 2028, which makes the current share price of around $50 look like a bargain. Investors that take advantage of the sell-off are likely looking at handsome gains down the road.

Should you invest $1,000 in Meta Platforms right now?

Before you buy stock in Meta Platforms, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, Roku, The Trade Desk, and Walt Disney. The Motley Fool has a disclosure policy.