Fox is set to buy Roku in a $22 billion deal, the companies announced on Monday.
Together with Tubi, the combined company would hold the third-largest share of U.S. television viewership. Both Fox and Roku noted they intend to keep the latter as "an open, partner-friendly platform" in a move that bets on "the enduring primacy of live sports and news and the continued rise of streaming."
Fox will acquire Roku for $160.00 per share in a combination of 60% cash and 40% Class A common stock, with Fox shareholders owning approximately 73% of the combined company and Roku shareholders at approximately 27%. The deal implies a total equity value of $25 billion and an enterprise value of $22 billion.
"This is a defining moment for Fox, and a natural extension of the deliberate and focused strategy we have been executing for nearly a decade," Fox Corp. CEO Lachlan Murdoch said in a statement. "In 2019, we reoriented the company around live news and sports. In 2020, we acquired Tubi and under our stewardship it has become one of the most successful businesses in streaming. Today, we take the next step: bringing together the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it."
"This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile," he continued. "And we are executing this acquisition from a position of financial strength – maintaining our investment grade balance sheet while providing our shareholders with an uninterrupted return of capital program in the form of share buybacks and dividends. Roku pioneered streaming TV and scaled it into a leading CTV platform. Together, we intend to lead its next chapter."
"Over the past two decades, we've built Roku into the leading TV streaming platform, reaching more than 100 million households globally and reshaping how people discover and enjoy entertainment," Roku founder and CEO Anthony Wood added. "I'm incredibly proud of what our team has built, and the combination with Fox is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers. That's why our Board of Directors unanimously determined after concluding its strategic review process that this transaction offers a significant premium to Roku shareholders while also providing them with the opportunity to participate in the compelling future upside of the combined company. I couldn't be more excited about what we'll accomplish together."
Upon closing, Wood will join the Fox board of directors and remain in an undisclosed, ongoing role. The deal is expected to close in the first half of 2027, pending regulatory approval.
Shares of streaming pioneer Roku (NASDAQ: ROKU) jumped about 20% on Friday, touching their highest level in about four years, after Bloomberg reported that the company is in talks to sell itself. According to the report, Roku has held discussions with at least one unnamed U.S. media company about a potential combination, though no decisions have been made and there is no certainty the talks will lead anywhere. At one point during the session, the stock was up as much as 24%.
The chatter is easy to get excited about. A strategic buyer would be acquiring a platform that reaches more than 100 million streaming households, and the company's market value sits at about $21 billion as of this writing.
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But a rumor is not a bid. And the takeover headline overshadowed a second catalyst behind Friday's move -- one that is already confirmed, and one that comes with a date: June 22.
Here's why that date may matter more than the deal talk.
Image source: The Motley Fool.
The catalyst on the calendar
On June 5, S&P Dow Jones Indices said Roku will be added to the S&P MidCap 400 before the market opens on Monday, June 22, as part of the index provider's quarterly rebalance, joining under the index's communication services group.
That may sound like nothing more than housekeeping, but it leads to real buying. Index funds and exchange-traded funds that track the S&P MidCap 400 have to hold what the index holds, so once Roku is in, those funds need to buy the stock to match the benchmark. This kind of mechanical demand, therefore, is pretty much in the bag at this point -- and it shows up regardless of price or whether the sale talks go anywhere.
So, the reported deal discussions are preliminary and may not amount to anything. The index addition, by contrast, is a known, dated event.
Of course, this is a one-time wave of demand rather than a lasting change in the business's value. A business's performance will likely be the main driver of a stock's value over the long-term. So, I wouldn't count on this index inclusion as a guarantee that the stock will do well.
And it's worth noting that things can go sour after an inclusion, too. Consider The Trade Desk. Since its inclusion in the S&P 500 commenced on July 18 of last year, the stock has slid more than 75%.
What investors are actually buying
The bigger question is arguably what sits beneath the index flows and the deal chatter. And here, the growth stock's recent results help the case.
In the first quarter of 2026, reported in late April, Roku's platform revenue (the advertising and subscriptions business that runs on top of its operating system) rose 28% year over year to $1.13 billion. That was an acceleration from 18% growth in the fourth quarter of 2025. Advertising climbed 27%, helped by a shift in how Roku sells its video advertising inventory.
"The majority of our video delivery is now through third-party programmatic partners, and we are growing quickly," said Roku Media President Charlie Collier during the company's first-quarter earnings call.
Additionally, subscriptions grew 30%, or about 23% excluding Roku's Frndly acquisition.
Just as notable is the company's swing in profitability. Roku posted net income of $86 million in the first quarter, reversing a loss in the same period a year earlier, and it has now been profitable in every quarter since the middle of 2025 after years of losses. And free cash flow over the trailing 12 months reached an all-time high, and management has said it expects to reach $1 billion in annual free cash flow by 2028, if not sooner.
But one part of the business continues to drag on results. Roku sells its players and TVs at or below cost to pull viewers onto the platform, and device revenue fell 16% in the quarter and carried a negative margin. Management also warned that tightening memory-chip supply could weigh on device margins in the second half of the year.
So, what does all of this mean for Roku stock?
After Friday's pop, Roku trades at north of 100 times earnings, or about 60 times this year's expected earnings -- a rich valuation that is downright difficult to justify.
With this said, I do think the platform business is genuinely inflecting, and the 100 million streaming households it crossed in April give it the scale a media buyer might covet. But index buying is mechanical and temporary, and the deal talk may never materialize. Ultimately, neither is a reason to own Roku for the long haul. And with so much already priced in after the run-up, I'll be passing on Roku stock at this level, despite the buzz.
Should you buy stock 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 $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,259,391!*
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roku and The Trade Desk. The Motley Fool has a disclosure policy.
One of Friday's biggest winners was Roku (NASDAQ: ROKU), even if that title warrants an asterisk. The company behind the country's most popular TV streaming operating system jumped 20% after sources told Bloomberg Roku was in talks with at least one media company for a potential sale.
Roku doesn't need to be bailed out. It's growing faster than it has in several years. It's been consistently profitable over the past year, and its balance sheet is flush with more than $2 billion in cash and no long-term debt. It shouldn't be desperate, giving it more leverage than a typical company that is reportedly open to a buyout.
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Image source: Getty Images.
There are plenty of potential suitors, if the account is accurate. Let's look at five possible buyers that just make sense to have Roku on their side.
I think Comcast (NASDAQ: CMCSA), Microsoft (NASDAQ: MSFT), Netflix (NASDAQ: NFLX), The Trade Desk (NASDAQ: TTD), and Disney (NYSE: DIS) are five names to watch, in that order. Let's take a closer look at the five potential suitors for Roku.
1. Comcast
A company that relies on cable TV and broadband internet for more than half of its revenue -- and the lion's share of profitability -- may seem an odd choice at the top of this list, but follow the money. Folks are cutting the cord that's tethering them to cable TV. They're flocking to Roku and other streaming platforms.
Buying Comcast transforms the sleepy media stock from having its largest business as a disruption risk to owning the leading disruptor. Roku does that immediately. It will take time for operating profit to offset the loss of Comcast's cash cow, but it's a strong pivot.
Comcast needs a spark. Comcast stock has lost more than a quarter of its value over the past year. In fairness, though, all five of these stocks have fallen between 16% and 73% over the past year. They all need a spark.
However, Comcast has missed out on back-to-back summers of smaller rivals being acquired, fortifying a competitor. A spinoff and a juicy 5.4% dividend yield haven't attracted investors. It's time for a more aggressive move.
2. Microsoft
I'm not seeing Microsoft on the list of analysts and buyout watchers handicapping this particular race, but it does make sense for Microsoft to make a move. Microsoft's Xbox has gone from a leading platform for digital streaming -- being the first console to pair up with Netflix in its TV streaming efforts -- to an afterthought. Sure, Xbox owners can still access all of the popular apps, but that leaves its audience of viewers to die-hard gamers.
Microsoft saw rival consumer tech behemoths roll out Fire, Chromecast, and Apple TV to go mainstream. Buying Roku would make it the top dog in both dongles and factory-installed TV operating systems. Unlike its three rivals already entrenched in this niche, Microsoft has an easier path to regulatory approval in this particular market. Microsoft is also the wealthiest company on this list. Its market cap of $2.9 trillion and a cash balance four times Roku's enterprise value make it an easy lift.
3. Netflix
If Netflix were smart, it wouldn't be in this situation. The company had Roku founder CEO Anthony Wood in the building, working on what would've been its first streaming device. Netflix decided against going that route, and Roku took things from there.
Netflix saw what happened to its stock after it made a play for Warner Bros. Discovery (NASDAQ: WBD) late last year. The stock only started to recover after Netflix lost out, collecting a hefty termination fee in the process.
Netflix doesn't need to own the leading app ecosystem. It might also have a harder time getting antitrust regulators to sign off. However, if there's a juicy prize out there, it's fair to say that Netflix is on the short list of contenders after falling short on Warner Bros. Discovery.
4. The Trade Desk
Roku and The Trade Desk are passing ships. Roku stock has soared 87% over the past year. The Trade Desk has plummeted 73%, far worse than the double-digit declines for other names on this suitor list. There's been a total reversal of fortune.
A year ago, bears were concerned that The Trade Desk would eat into Roku's market. Instead, Roku wound up being the more fortified player by striking a well-received partnership with The Trade Desk's largest adtech rival in connected TV. Revenue has decelerated for four consecutive quarters, from 25% in the first quarter of last year to a 12% increase in its latest report. Roku's revenue growth has accelerated to 22% in the first three months of this year, its strongest showing in four years.
A big challenge for The Trade Desk in pulling this off is how the two have truly changed paces. The Trade Desk's enterprise value of $8 billion is less than half of Roku's $19 billion. This feels like something more out of the Ryan Cohen playbook. A deal can be done, and The Trade Desk CEO Jeff Green needs a transformative deal like this to cool his hot seat. However, in this scenario, don't be surprised if a deal for The Trade Desk to acquire Roku winds up going the other way around.
5. Disney
There is less of an incentive for Disney to make a play for Roku than for the other players, but read the room. Disney has a great content catalog and a streaming business that has been profitable for two years. However, new CEO Josh D'Amaro came over after heading up the theme park business at the House of Mouse.
In two months, at its D23 fan conference, D'Amaro will discuss many of the new experiences coming to Disney's global theme parks. Disney will also talk about new studio content. He may want to consider a signature move to prove how important streaming is to the overall business, such as a potential purchase of Roku. This is the least likely of the five scenarios to happen, but it wouldn't be a shock if the company behind some of the most popular streaming apps -- Disney+, Hulu, and ESPN -- decides to be the forever home of the lucrative Roku ecosystem.
Should you buy stock 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 are built for long-term growth and 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 $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,259,391!*
That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.
Rick Munarriz has positions in Netflix, Roku, The Trade Desk, and Walt Disney. The Motley Fool has positions in and recommends Microsoft, Netflix, Roku, The Trade Desk, Walt Disney, and Warner Bros. Discovery. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.
Roku ROKU shares ended the last trading session 20.1% higher at $143.66. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 4.9% loss over the past four weeks.
Roku's shares are benefitting from acquisition speculation after reports emerged of preliminary sale talks with a U.S. media company.
This video streaming company is expected to post quarterly earnings of $0.61 per share in its upcoming report, which represents a year-over-year change of +771.4%. Revenues are expected to be $1.3 billion, up 16.9% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Roku, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ROKU going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Roku belongs to the Zacks Broadcast Radio and Television industry. Another stock from the same industry, Sirius XM SIRI, closed the last trading session 0.3% lower at $27.52. Over the past month, SIRI has returned 5.2%.
For Sirius XM, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.78. This represents a change of +36.8% from what the company reported a year ago. Sirius XM currently has a Zacks Rank of #3 (Hold).
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You're not supposed to be upset when you see your largest holding trading sharply higher, but that's just where I was on Friday afternoon. Roku (NASDAQ: ROKU) shares popped 20% on the final market day of the week, most of that coming in the last hour and change.
I ran through the usual suspects that would cause this kind of midday jump. It couldn't be fresh financials. Roku is six weeks away from its next quarterly update, and even if that wasn't the case, it wouldn't push out results during the trading day. A major analyst upgrade wasn't going to create much of a fuss for a widely followed company. An activist investor rattling the cage was unlikely. With Roku's ascending fundamentals and market-thumping stock performance over the past year, a proxy battle couldn't be in the cards.
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A marketing or content partnership, like the promising ad deal Roku struck with Amazon last year, can move the stock higher. It just didn't seem likely that it would be that much higher. That left the lone possibility for the spike being Roku's status as a buyout candidate, and, unfortunately, I was right.
Image source: Getty Images.
Thinking outside the box
Bloomberg reported late in Friday's trading day that Roku is exploring the sale of the company. Unnamed sources close to the matter say that discussions have taken place with at least one media company as a potential buyer. Buyout chatter doesn't always move a stock, but when it comes from a historically reliable news source, the market takes it seriously.
Buyout talks usually end in question marks instead of exclamation points and signatures, and Roku isn't desperate. It will need someone to pay a healthy premium to take it out of investors' hands. The shares have soared 87% over the past year. It was crushing the market with a roughly 50% jump before Friday's pop.
Roku is finally becoming the company investors were hoping it would be. It's been consistently profitable over the past year. The 22% year-over-year growth it posted in its latest quarter is its strongest top-line increase in four years. The same company that was struggling with monetization a couple of years ago is coasting now. Roku delivered 27% growth in ad revenue and a 30% uptick for its subscriptions business in the first quarter. With a growing audience of more than 100 million homes on its platform, Roku continues to be larger than the well-financed consumer tech titans in this space.
It only helps Roku's leverage that Evercore ISI's analyst raised its price target on the shares earlier in the day from $160 to $185. Even after Friday's afternoon surge, that analyst price target is a healthy 29% premium to its weekly close.
Teardrops in the bidding war
I've written about Roku's buyout potential for years. Even last summer, in a podcast discussing the next potential Rule Breakers buyout, I went with Roku. I always figured it would be one of the consumer tech giants in this space. More than likely, I figured it would be a tech behemoth that never made a dent in this market. That's you, Microsoft.
Bloomberg's report that Roku's first conversation has been with an unnamed media company is surprising. The appeal to Roku is its agnosticism, a big reason it's been able to keep three of the "Magnificent Seven" companies in this niche far behind in its rearview mirror. If a media company behind one of the leading streaming service stocks gobbles up Roku, it's going to be harder to appeal to the thousands of other streaming apps on its operating system.
Sure, there's an allure to pitching streaming ads to Roku's gargantuan audience. Connected TV is the future, and Roku is in the pole position, with its viewers spending an average of more than four hours a day on the platform.
You can argue that I should be happy if someone is willing to pay 20% to 30% more for Roku stock than where it's trading at today. Even if it takes a few quarters for the deal to close, it should beat the market. I can also just bow out when a potential deal is announced, putting that money to work elsewhere.
You would be right, but I'm still allowed to be selfish. When you put in the time and research into a high-conviction stock, it's not easy to find a replacement. Suffering through plenty of highs and lows with Roku over the years, I hate to see a potential exit strategy now, when the bullish momentum actually feels sustainable.
I won't get in the way of a buyout. I'm not going to storm the wedding and object to the pairing when given the chance. But I will take my premium and move on to the reception hall. So if you see me teary-eyed as the Chicken Dance plays, know that I wasn't the chicken here.
Should you buy stock 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 are built for long-term growth and 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 $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,259,391!*
That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.
Rick Munarriz has positions in Roku. The Motley Fool has positions in and recommends Amazon, Microsoft, and Roku. The Motley Fool has a disclosure policy.
Roku (NASDAQ:ROKU) has been something of an enigma for shareholders. Despite being at the top of its game, the stock hasn't gotten the respect it deserves. Yet the company's business is firing on all cylinders. However, investors have started to come around, and the stock has gained 78% over the past year.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
In the latest move, the stock spiked more than 20% on Friday on reports that the company has been in discussions to be acquired by a major U.S. media company, according to Bloomberg, citing "people with knowledge of the matter."
It appears that investors haven't been the only ones taking a fresh look at the streaming pioneer. Let's review Roku's recent results, understand what might make the company attractive to a potential suitor, and why investors shouldn't sleep on these reports.
The Roku logo superimposed over a Roku TV in a living room.
Image source: The Motley Fool.
A lot to like
After years of operating losses and investing to enter new markets, Roku turned the corner in Q2 of 2025 and has been profitable in every quarter since. Perhaps as importantly, the company continues to increase its market share and expand its reach, building the foundation for future growth. Its recent results help paint a rosy picture.
In the first quarter of 2026, Roku generated total revenue of $1.2 billion, up 22% -- marking the company's strongest year-over-year quarterly growth in four years. The results were driven higher by its platform segment, which includes advertising revenue, which increased 27%, and subscriptions, which jumped 30%. Overall, platform revenue rose 28% to $1.1 billion, while device revenue declined 16% to $118 million. Roku sells its devices at or near cost to draw viewers into its ecosystem (more on that later).
The company continues to find new ways to augment that strategy, which keeps paying off. Last year, Roku launched its own paid streaming channel, named Howdy. The subscription service launched in August at a modest price tag of just $2.99 per month to attract more price-sensitive customers. Roku seeded its ad-free channel with thousands of titles totaling 10,000 hours of entertainment, with programs and movies from Lionsgate, Warner Bros. Discovery, and FilmRise. It also included select Roku original programming.
While critics quickly dismissed the service as too little, too late, Roku was undaunted. In the ensuing months, Howdy has racked up more than 1 million subscribers, according to a report by industry analyst Antenna. The report also noted that Howdy had enviable retention rates, with 51% of those who signed up in the first month were still subscribers six months later, far exceeding the retention rates of premium and specialty and subscription video on demand (SVOD) services, at 47% and 38%, respectively.
Another winning strategy has been The Roku Channel -- the company's home-grown ad-supported channel -- which closed out 2025 with a 3% share of all U.S. TV viewership, according to Nielsen. The channel ranks in the Top 10 among all media companies, putting Roku in select company alongside Alphabet's YouTube, Disney, and Netflix, among others. Roku previously revealed that The Roku Channel ranked No. 2 on its platform in terms of engagement.
If that weren't enough, Roku announced earlier this year that it had surpassed 100 million households worldwide, illustrating its growing global reach. Moreover, the company's decision to sell its devices at or near cost is paying off: Roku's collection of branded TVs and other streaming devices are used by "more than half of all U.S. broadband households."
Roku's large and expanding reach makes it an attractive target for a potential acquirer, giving them instant access to more than 100 million households. But even if Roku isn't acquired, it has all the pieces in place for a successful future, which makes it an attractive stock for investors.
The recent spike in its share price has skewed its valuation, selling for 40 times next year's expected earnings. However, measured using the more appropriate forward price/earnings-to-growth (PEG) ratio -- which takes into account Roku's rapid growth -- clocks in at 0.19, when any number less than 1 is the standard for an undervalued stock.
That's why investors shouldn't sleep on Roku -- merger or not.
Should you buy stock 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 are built for long-term growth and 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 $438,283!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,257,427!*
That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.
Danny Vena, CPA has positions in Alphabet, Netflix, Roku, and Walt Disney. The Motley Fool has positions in and recommends Alphabet, Netflix, Roku, Walt Disney, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
Roku saw its share prices climb to a new four-year high on Friday, as investors positioned their portfolios following reports that it is exploring a sale.
In intra-day trading, the stock surged to its highest price of $148.88 before paring gains to finish the session just up by 20.08 percent at $143.66 apiece.
Photo by Tima Miroshnichenko on Pexels
According to a report by Bloomberg citing people privy to the matter, Roku Inc. (NASDAQ:ROKU) is looking at potential options, including selling itself or tying up with media companies.
It is said to be already in talks with at least one media giant for a potential merger, albeit no final decision has been made.
In other news, Roku Inc. (NASDAQ:ROKU) told the Securities and Exchange Commission on Thursday that its Chairman and CEO, Anthony Wood, disposed of $2.13 million worth of its shares in a series of transactions last Wednesday, June 10. The sale covered 18,000 shares at prices ranging from $117.01 to $120.17 apiece.
In other news, Roku Inc. (NASDAQ:ROKU) reported a stellar earnings performance in the first quarter of the year, swinging to a net income of $85.7 million from a $27.4 million net loss in the same period last year.
Total net revenues increased by 22 percent to $1.249 billion from $1.021 billion year-on-year.
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