Forget Roku: This Stock Is a Far Better Value for Long-Term Investors

Roku (NASDAQ:ROKU | ROKU Price Prediction) is the streaming name everyone wants to talk about after a 64.41% EPS beat and a 79.82% one-year run. But here’s what you should actually be watching.

Roku is the textbook crowded trade right now. The stock has ripped 15.29% year to date and trades at a trailing P/E of 93 with a forward multiple of 53, priced like it has already won connected TV advertising. The fundamentals say otherwise. The Devices segment is in structural decline at -16% YoY with gross margins in the high negative 20% range, and management itself flags tightening memory chip supply as a margin headwind for the back half of 2026. This is a pure-play CTV aggregator competing against Amazon, Google, and Samsung, with a $400 million buyback, zero dividend, and a beta of 2.04. That is a risk profile income-focused investors may want to weigh carefully.

Now look at Walt Disney (NYSE:DIS). The stock is down 8.96% year to date and sits at $103.58, trading at just 17 times trailing earnings and 15 times forward. That is the entire setup: Wall Street is paying a premium for the streaming story at Roku while the actual streaming profitability inflection is happening at Disney for half the multiple.

Three reasons Disney screens better here.

1. A diversified moat Roku cannot replicate. Disney’s Q2 FY2026 delivered $25.17 billion in revenue, up 6.55%, with operating income of $4.603 billion, up 31.29%. Experiences booked record Q2 revenue of $9.487 billion, up 7%, with per-capita spending at domestic parks up 5%. ESPN just absorbed the NFL Network. Roku rents the living room. Disney owns Pixar, Marvel, Lucasfilm, ABC, and the cruise line.

2. The streaming inflection is here, and it’s at Disney. Entertainment SVOD operating income surged 88% to $582 million, hitting a 10.6% operating margin for the first time. Zootopia 2 pulled in $1.9 billion at the global box office and over 1 billion streamed hours. Management raised FY2026 adjusted EPS growth guidance to ~16% and guided to double-digit growth again in FY2027.

3. Capital return retirees actually receive. Disney pays a $1.50 annual dividend with the next payment July 22, 2026. The buyback was raised to at least $8 billion for FY2026, with $5.5 billion already executed in the first six months. Free cash flow hit $4.941 billion in the quarter alone. And on March 31, eight Disney directors bought stock on the open market at $96.96, a coordinated insider vote of confidence Roku simply does not have.

Josh D’Amaro put it plainly on the call: “Our creative and operational momentum drove strong quarterly results, and we continue to expect growth to accelerate in the second half of the fiscal year.” Analysts carry a $129.47 price target on the name.

Roku is the story stock. Disney is the cash machine trading at a discount because the headline writers got bored. Disney looks like the more defensible setup on this risk-reward.