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Investing.com - BofA Securities has maintained its Buy rating and $171.00 price target on Roblox Corp. (NYSE:RBLX), while increasing its EV/EBITDA multiple from 40x to 47x. This target represents potential upside from the current price of $115.98, though InvestingPro data shows the stock is trading above its Fair Value, with shares up an impressive 210% over the past year.
The research firm based its price objective on a 47x EV/CY27 EBITDA multiple, citing "potential for greater EBITDA inflection after the investment cycle" as justification for the higher multiple. This optimistic outlook comes despite Roblox not being profitable over the last twelve months, with an EBITDA of -$854.87 million.
BofA highlighted Roblox’s recent performance, noting the company has delivered three consecutive quarters of accelerating growth in 2024, with year-over-year increases of 31% in Q1, 50% in Q2, and 70% in Q3, following eight quarters of 20%+ growth through Q4 2023. This acceleration aligns with InvestingPro data showing 27.39% revenue growth in the last twelve months, with analysts forecasting 68% revenue growth for fiscal 2025.
The firm expressed confidence in management’s investment strategy, which aims to sustain high growth through 2030, and believes this approach supports the company’s valuation premium.
BofA Securities stated that Roblox’s "singular position within the Video Game ecosystem" justifies "a multiple well in excess of rule of 40 and high growth software stocks," which it quantifies as 50x EV/CY26 EBITDA.
In other recent news, Roblox Corp reported its third-quarter 2025 earnings, highlighting a notable increase in revenue alongside a narrower-than-expected loss. The company achieved an earnings per share (EPS) of -0.37, which exceeded analysts’ projections of -0.49. Revenue reached 1.92 billion dollars, surpassing the anticipated 1.68 billion dollars. These financial results demonstrate a strong performance for the quarter. Despite these positive figures, the company’s stock experienced a decline in pre-market trading. The earnings call did not indicate any significant changes in company strategy or operations. Analysts have not provided updates on their ratings for Roblox following the earnings announcement. The focus remains on how the company will continue to navigate its financial trajectory in upcoming quarters.
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