Roku ROKU and Paramount Global PARA are both competing for dominance in the ad-supported streaming space, but their recent performances paint contrasting pictures. Roku continues to scale its platform and expand its advertising toolkit, while Paramount Global leans on franchise content and viewer engagement across Paramount+ and Pluto TV.

With advertising dynamics shifting and investors seeking resilient growth in streaming, the key question is: Which stock offers better upside in 2025? Let’s delve deeper and compare Roku and Paramount’s first-quarter 2025 results and ad strategies to determine which company is better positioned for the road ahead.

The Case for ROKU Stock

Roku’s ad-supported streaming business continued to deliver strong momentum in the first quarter of 2025, driven by its expanding platform scale and innovative advertising strategies. Platform revenues grew 17% year over year to $881 million, supported by both video advertising and streaming services distribution. Roku’s reach now exceeds half of all U.S. broadband households, with its Home Screen serving as the lead-in for TV for more than 125 million people daily.

A key highlight was the growth of The Roku Channel, which became the #2 app on the Roku platform in the United States by engagement. Streaming hours for the channel surged 84% year over year. More than 85% of its viewing came through Roku’s curated experience, showcasing the effectiveness of Roku’s AI-powered content discovery and interface features.

Ad activities outside the Media & Entertainment vertical outperformed the U.S. OTT ad market. The company has improved its ad measurement capabilities through integrations with platforms like Adobe and INCRMNTAL, and made TV advertising more accessible to small businesses via its self-service Roku Ads Manager.

To support advertisers of all sizes, Roku has invested in tools that allow seamless buying of Roku Media through direct insertion orders, preferred DSP partners, or self-serve solutions. This flexibility, along with innovative formats like shoppable ads and performance-driven targeting, is strengthening Roku’s position as a leading ad-supported streaming platform.

The Case for PARA Stock

Paramount’s ad-supported streaming ecosystem delivered mixed results in the first quarter of 2025. Paramount+ global watch time per user increased 17% year over year, and Pluto TV achieved its highest consumption ever with a 26% year-over-year increase in global viewing time. The company highlighted strong audience engagement, driven by hits like 1923, Dexter: Original Sin, and the global premiere of MobLand, which became Paramount+’s biggest global series launch ever.

The company continues to invest in premium originals and franchise extensions. These content-led efforts are aimed at increasing monetization over time, supported by expanding ARPU and lower churn. 

However, the advertising performance within the digital video segment revealed emerging challenges. Direct-to-consumer advertising revenues declined 9% year over year. The decline was largely attributed to increased supply in digital video inventory, which created a softer pricing environment, especially affecting Pluto TV, which has the greatest exposure to the indirect ad marketplace.

The company acknowledged that supply-demand dynamics have yet to stabilize. While it remains confident in future monetization, it noted that the current digital advertising softness has yet to show signs of meaningful recovery.

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Price Performance and Valuation of ROKU and PARA

Performance metrics strengthen Roku's case. Over the past month, shares of ROKU have returned 21.1%, outperforming the Zacks Consumer Discretionary sector and the S&P 500 index’s growth of 15.9% and 9.1%, respectively. PARA, on the other hand, has underperformed ROKU, the sector and the S&P 500 index. Its shares have gained 8.8% over the past month.

ROKU Outperforms PARA, Sector in 1-Month Time FrameZacks Investment Research

Image Source: Zacks Investment Research

In terms of valuation, ROKU’s current price-to-cash flow ratio of 33.89X is ahead of PARA’s  11.92X. Although ROKU is trading at a significant premium compared to PARA, the premium valuation reflects investor confidence in the company's growth potential for the rest of 2025. In contrast, PARA’s current price-to-cash flow ratio indicates more cautious market sentiment around its near-term performance.

ROKU and PARA ValuationZacks Investment Research

Image Source: Zacks Investment Research

How Do Earnings Estimates Compare for ROKU and PARA?

The Zacks Consensus Estimate for ROKU’s 2025 loss is pegged at 17 cents per share, which has narrowed by 34.61% over the past 30 days, indicating a 80.9% increase year over year. The consensus estimate for 2025 revenues is pinned at $4.54 billion, suggesting year-over-year growth of 10.37%.

Roku, Inc. Price and ConsensusRoku, Inc. Price and Consensus

Roku, Inc. price-consensus-chart | Roku, Inc. Quote

The Zacks Consensus Estimate for PARA’s 2025 earnings is pegged at $1.31 per share, which has been revised downward by 19.63% over the past 30 days, indicating a 14.94% decrease year over year. The consensus estimate for 2025 revenues is pinned at $28.43 billion, suggesting a year-over-year decline of 2.67%.

Paramount Global Price and ConsensusParamount Global Price and Consensus

Paramount Global price-consensus-chart | Paramount Global Quote

Why ROKU Offers a Better Investment Opportunity

Roku stands out as the stronger streaming investment in 2025. The company continues to post robust platform growth, with expanding ad reach, innovative tools like Roku Ads Manager, and a surge in engagement on The Roku Channel. These developments have translated into outperformance in both stock price and revenue momentum. The narrowing loss estimates and higher investor confidence further reinforce Roku's bullish narrative.

Paramount Global, while showing strong engagement across its platforms, faces short-term headwinds in digital advertising. The decline in DTC ad revenues and challenges from oversupply in the ad market have weighed on sentiment. 

ROKU currently carries a Zacks Rank #2 (Buy), whereas PARA has a Zacks Rank #5 (Strong Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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