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On Thursday, Benchmark analyst Mike Hickey increased the price target for Roblox Corp . (NYSE: NYSE:RBLX) shares to $71 from the previous $60, while reaffirming a Buy rating on the stock. The adjustment follows Roblox’s impressive fourth-quarter performance, which saw the company exceed the high end of its bookings guidance with $1.36 billion, marking a 21% year-over-year increase. The company’s adjusted EBITDA (AEBITDA) reached $382 million, significantly surpassing consensus estimates, and free cash flow stood at $121 million, also above the high end of guidance. According to InvestingPro data, Roblox has maintained strong momentum, with its stock price near its 52-week high of $75.74 and a substantial market capitalization of $42.8 billion.
Roblox faced challenges this quarter, including strong competition from PlayStation’s Q4 2023 launch and a major Xbox update. Despite these hurdles, the company’s December exit growth was robust, with mobile and desktop bookings up by 27%, and prepaid/console bookings increasing by 22%. For the full year of 2024, Roblox reported a 23.5% growth in bookings, and the AEBITDA margin widened by over 600 basis points. InvestingPro data reveals the company’s impressive momentum, with a 100.35% price return over the past six months and revenue growth of 27.98% in the last twelve months.
Looking ahead to the first quarter of 2025, Roblox expects bookings to reflect early-quarter momentum. However, the company anticipates a tougher year-over-year comparison because Easter will occur in the second quarter this year, as opposed to the first quarter in 2024. Nevertheless, management has set forth an ambitious guidance for 2025, targeting a 20% growth in bookings and an approximate 150 basis point expansion in margins. While the stock’s RSI indicates overbought territory, investors seeking deeper insights can access over 12 additional key metrics and analysis through InvestingPro’s comprehensive research reports.
Hickey remains optimistic about Roblox’s long-term growth strategy, suggesting that bookings growth could potentially surpass the growth in user and hour engagement for fiscal 2025. This would be driven by the company’s ongoing monetization efforts. Hickey’s recommendation encourages investors to consider increasing their holdings in Roblox during market pullbacks, such as the current one. With the raised price target and sustained Buy rating, Benchmark signals its confidence in Roblox’s financial trajectory and market position, despite the company’s current EBITDA of -$962.63 million.
In other recent news, Roblox Corp. has been the subject of several analyst notes. BofA Securities has increased its price target on Roblox shares from $70.00 to $79.00, maintaining a Buy rating. This adjustment is based on a higher expected enterprise value to forecasted calendar year 2026 earnings before interest, taxes, depreciation, and amortization (EV/CY26E EBITDA) multiple. The firm’s analysts have noted the market’s recent positive reevaluation of Roblox’s stock.
In addition, BTIG analyst Clark Lampen increased the price target on Roblox shares to $66 from the previous target of $56, while maintaining a Buy rating. This decision is based on several positive indicators, including new account growth and signs of improved user engagement. HSBC initiated coverage on shares of Roblox with a Buy rating and a price target of $63.00, citing a positive shift in the online video gaming platform’s economic outlook and market potential.
Raymond (NSE:RYMD) James also raised its price target on Roblox shares to $63.00 from the previous $60.00, reaffirming a Strong Buy rating. This adjustment comes amid positive indicators for the company’s performance as the fourth quarter progresses. Lastly, the disbanding of Hindenburg Research, known for its critical reports that often led to significant drops in the stock prices of the companies it scrutinized, may relieve some of the pressure on stocks that were potential targets for Hindenburg’s investigations, including Roblox.
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