Peering Through The Wreckage For DHQs

Research evidence excerpt

Peering Through The Wreckage For DHQs

should remain well positioned, as ROKU offers marketers access to premium content and high-

value audiences (comparable to larger streamers) but typically at superior price points and with greater efficiency and better

targeting (enabled by a growing stable of deep DSP integration partners, with GOOGL recently added to existing partners

AMZN and TTD)—a value proposition that we believe should resonate with marketers amid potentially increased ad budget

scrutiny. And on the consumer side, we think ROKU offers superior value across its device lineup and its subscription

offerings—e.g., the low-priced Howdy subscription (just $2.99 per month) is a clear price leader among SVOD services—

that should resonate strongly with consumers amid a weaker macro backdrop.

What’s really new? Programmatic ads are now at a tipping point (programmatic accounted for the majority of Q1 ad spend

and grew 40% Y/Y), we expect an updated user interface to draw deeper consumer engagement and new monetization

opportunities, and the subscription business is gaining momentum—Q1 was the highest-ever quarter for premium

subscription sign-ups, Howdy is expanding its footprint (to Prime Video, standalone iOS and Android apps, and Mexico) and

new premium subscription partners (Apple TV and Peacock, among others) represent an incremental catalyst. At the same

time, we expect that higher memory pricing should drive TV OEMs to increase ROKU’s SKU share, accelerating user base

momentum in the back half of 2026 and into 2027.

How to think about upside? We continue to see meaningful 30%+ upside to our $160 PT, based on 25x 2027 EV/EBITDA.

We believe this premium multiple is merited by ROKU’s premium Platform revenue growth, strong catalyst path, the