Roku's (ROKU) US TV sales are under tariff pressure, but the company's approach to profitable expansion could somewhat mitigate looming risks, Wedbush said in a research note Monday.

The brokerage noted that Roku can partially mitigate the tariff impact through international expansion, platform enhancements, growth in advertising inventory, and the addition of full-funnel e-commerce options for advertisers.

Discounting devices and increasing average revenue per user for existing customers could also help limit the effects, according to the note.

Wedbush said it expects Roku to continue gaining market share as advertisers shift budgets from linear TV to connected TV, especially in a constrained spending environment in 2025. However, the analysts warned that volatile TV pricing could limit new user growth until tariffs are lifted.

The brokerage said it expects the company to report Q1 revenue north of $1 billion, a loss per share of $0.27, and a flat gross margin from the platform segment as ad revenue bounces back against subscription revenue and the company focuses on "high-margin platform accounts over device profitability."

Wedbush reiterated its outperform rating on the stock and cut its 12-month target price to $100 per share from $125.

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