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Investing.com - BMO Capital has reiterated an Outperform rating and $155.00 price target on Roblox Corp. (NYSE:RBLX), currently trading at $97.37, as competition in the user-generated content (UGC) gaming space intensifies. The stock has delivered an impressive 89% return over the past year despite its volatile price movements.
The firm highlighted a new partnership between Epic Games and Unity that will bring Unity Games into the Fortnite UGC ecosystem, representing Epic’s continued expansion into the UGC space.
BMO noted this move follows Epic Games’ recent significant increase in developer revenue-share, indicating growing competition in the UGC gaming market.
The firm also mentioned its view that the upcoming GTA VI will likely include a UGC component, further adding to competitive pressures in the space where Roblox currently dominates.
Despite these competitive developments, BMO questioned whether competitors could successfully challenge Roblox’s position, citing the company’s substantial scale of 152 million daily active users and annual UGC creator payouts totaling $1.5 billion.
In other recent news, Roblox has been sued by Texas Attorney General Ken Paxton over alleged child safety concerns. The lawsuit claims that the online gaming platform has misled parents about the risks it poses to children, adding to existing legal challenges from other states. On the financial front, Roblox reported third-quarter bookings of $1.92 billion, surpassing FactSet consensus estimates of $1.72 billion. The company also projected fourth-quarter bookings to reach $2.03 billion at the mid-point, indicating a 44% year-over-year growth.
Needham has reiterated its Buy rating on Roblox, maintaining a price target of $159 following the company’s better-than-expected earnings results. However, Oppenheimer has lowered its price target to $150, citing margin concerns. Jefferies also reduced its price target to $115, pointing to a cautious outlook for 2026 bookings and margins. Meanwhile, Goldman Sachs upgraded Roblox’s stock rating to Buy, increasing its price target to $180 due to the company’s growth potential and strong market position.
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