Roku Inc's stock surged 5.10% during intraday trading on Thursday, following positive analyst commentary from Morgan Stanley.

The investment bank highlighted Roku's transformation of its home screen into a dynamic, personalized experience, which is expected to unlock advertising revenue and accelerate the company's path toward achieving $1 billion in free cash flow. New financial disclosures reveal that Roku's advertising gross margins exceeded 60% in the first quarter, while its subscription division has grown into a $2 billion annualized revenue stream.

Morgan Stanley anticipates Roku will outperform conservative management guidance, driven by deepening advertising partnerships with Amazon and Alphabet's Google DV360, alongside upcoming cyclical tailwinds from political advertising and the 2026 FIFA World Cup. The firm reiterated its overweight rating on Roku and raised its price target to $170 from $150, citing strong cost discipline under CFO Dan Jedda as a key factor in pulling forward the company's free cash flow milestone.