Buy 3 Streaming Content Providers That Have Appreciated Past Month

Zacks Investment Research highlights Netflix (NFLX), Roku (ROKU), and Fox Corp (FOXA) as "Buy"-rated streaming content stocks showing recent positive price performance. Netflix is leveraging AI and ad-supported tiers to drive subscriber and ARPU growth, with expected revenue and earnings growth of 14% and 27.7%, respectively. Roku is benefiting from increased engagement on The Roku Channel and the popularity of its TV OS, projecting revenue and earnings growth of 10.5% and 80.9%, respectively. Fox Corp's growth is driven by affiliate fees and digital monetization, forecasting revenue and earnings growth of 15.2% and 31.8%, respectively.

Analysis

Zacks Investment Research has identified Netflix Inc. (NFLX), Roku Inc. (ROKU), and Fox Corp. (FOXA) as streaming content stocks with favorable Zacks Rank #2 (Buy) designations, noting their positive price performance in the past month. The streaming sector is characterized by intense competition for exclusive content, forcing firms to invest heavily in content creation to capture market share. Netflix demonstrated strong Q1 2025 performance, beating bottom-line consensus estimates, and reaffirmed its 2025 guidance despite potential economic headwinds. Key initiatives for Netflix include the US launch of its Ad Suite, with international expansion planned for Q2, and strategies such as an ad-supported tier, password sharing abolition, and price increases, positioning it as a defensive play. Netflix leverages AI for personalized recommendations and efficient streaming, projecting 14% revenue growth and 27.7% earnings growth for the current year, with its current-year earnings consensus estimate improving 3% over the last 60 days. Roku is capitalizing on increased user engagement on The Roku Channel, where streaming hours surged 82% year-over-year, and the market dominance of its Roku OS, the #1 selling TV OS in the United States. Roku, which has surpassed penetration in half of U.S. broadband households, anticipates current-year revenue growth of 10.5% and earnings growth of 80.9%, with its consensus earnings estimate up 10.5% in the last 30 days. Fox Corp. reported robust third-quarter fiscal 2025 results, driven by increased affiliate fees in its Television and Cable Network Programming segments. Growth is further supported by digital monetization at FOX News Media, live events at FOX Sports, and higher political advertising revenues. Fox's popular primetime lineup, targeting the 18-49 demographic, is expected to attract more advertisers. For the current year, FOXA projects revenue and earnings growth of 15.2% and 31.8%, respectively, with its current-year earnings consensus estimate improving 1.6% in the last 30 days.

Key Decisions for Investors

• Given the Zacks #2 (Buy) ratings and strong individual company growth prospects, including double-digit revenue and earnings growth forecasts alongside improving consensus earnings estimates, investors may consider these streaming stocks for potential capital appreciation.
• Investors should closely monitor Netflix's execution of its ad-supported tier strategy and its impact on subscriber acquisition and average revenue per user (ARPU), especially in light of sustained high content investment costs across the industry.
• For Roku, key performance indicators to watch include the continued growth of active accounts and streaming hours on The Roku Channel, and its ability to maintain market leadership with its TV operating system, which underpins its significant earnings growth projections.
• Fox Corp.'s performance will be influenced by its capacity to sustain affiliate fee revenues, capitalize on political advertising cycles, and maintain viewership for its key primetime programming; these factors should be monitored by investors.