Wedbush has an ‘Outperform’ rating on Roblox with a price target of $165, according to TheFly.
Roblox (RBLX) shares surged over 6% by midday trading on Monday after Wedbush called the company the “most compelling growth opportunity.”
Wedbush has an ‘Outperform’ rating on Roblox with a price target of $165, according to TheFly. The firm noted that, notwithstanding a slew of recent and forthcoming hit pieces and legal action, it views Roblox as a compelling growth opportunity in the video game sector. Retail sentiment remained unchanged in the ‘extremely bearish’ territory, with message volume at ‘extremely high’ levels, according to data from Stocktwits.
Wedbush cited management’s quick, decisive, and robust child safety response “should assuage investor concerns.” The firm added that the management has made better decisions regarding the flywheel from recent hit games, developer incentives, infrastructure improvements, and AI-driven discovery that are driving massive platform growth.
The firm added that genre expansion and aging up should increase potential ad inventory, while pricing optimization across games and regions should drive improved revenue streams.
Wedbush also noted that while it expects some ongoing volatility in Roblox’s share price when new hit pieces or legal action surface, it argued that Roblox continues to be quick to respond, with meaningful actions it has taken, with plans to create a safe and engaging environment across its age cohorts.
In July, Roblox CEO David Baszucki had said that second-quarter bookings marked a 51% surge year-on-year, fueled by momentum in key markets like Japan, India, the Philippines, Korea, and Indonesia.
Roblox stock has gained 116% this year and jumped over 180% in the last 12 months.
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