Roku, Inc. (ROKU) DCF Valuation
Why we don't show a single “fair value” for ROKU
Even the optimistic scenario of a conservative trailing-FCF model ($41.10) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$119.64 is justified only if free cash flow grows about +58.3% a year (fading to 2.5% long-run) at a 11.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 12.5% | $29.38 |
| Base case | 18.0%/yr | 11.5% | $34.91 |
| Optimistic | 20.0%/yr | 10.5% | $41.10 |
Current Price
$119.64
Market-Implied Growth
+58.3%/yr
vs +19.6% 5Y actual
Base-Case Model Value
$34.91
model output — not a price target
ROKU DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for ROKU (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $193.1M · 0.15B shares · net cash $1.2B
Estimated Fair Value
$52.13
-56.4% vs $119.64
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 18.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $119.64; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $63.01 | $65.53 | $68.41 | $71.73 | $75.61 |
| 10.5% | $55.33 | $57.15 | $59.20 | $61.52 | $64.17 |
| 11.5% | $49.28 | $50.63 | $52.13 | $53.81 | $55.70 |
| 12.5% | $44.40 | $45.43 | $46.56 | $47.80 | $49.19 |
| 13.5% | $40.40 | $41.20 | $42.06 | $43.01 | $44.05 |
About Roku, Inc.
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.
- Sector
- Communication Services
- Industry
- Entertainment
- CEO
- Anthony J. Wood