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On Thursday, BTIG analyst Clark Lampen adjusted the price target for Roblox Corp . (NYSE:RBLX) shares, raising it to $73 from the previous $66, while maintaining a Buy rating on the stock. The reevaluation followed Roblox’s fourth-quarter earnings report which, despite missing BTIG’s projections and slightly underperforming against buy-side expectations, presented first-quarter guidance for 2025 that aligned with investor forecasts and surpassed analyst expectations. According to InvestingPro data, Roblox has demonstrated impressive momentum with an 85.89% return over the past year and a remarkable 100.35% gain in the last six months.
Roblox’s fourth-quarter variance was primarily attributed to unforeseen challenges with console and pre-paid gift card headwinds. Nonetheless, the company exhibited a strong December with a year-over-year bookings growth of 25-27% in a normal comparison month, coupled with a healthy year-over-year margin improvement throughout the quarter. These results are expected to alleviate most concerns stemming from a retrospective audit of the company’s performance. InvestingPro analysis reveals that while the company maintains strong revenue growth of 27.98%, it faces challenges with gross profit margins at 24.67%. Subscribers can access 10+ additional ProTips and comprehensive financial metrics for deeper insights.
Lampen noted that Roblox’s management has effectively addressed concerns regarding the development community’s potential burnout from increased content creation demands. Additionally, Roblox has seen robust user growth in the early part of the first quarter, reporting a 35% year-over-year increase through January, with similar growth observed in February, although it is still early in the quarter.
The analyst expressed confidence in Roblox’s start to the first quarter, anticipating potential upside against top-line and margin guidance, which does not yet account for gross margin benefits from a mix shift. The new price target reflects a multiple on projected 2026 EBITDA that is more aligned with the company’s expected compound annual growth rate for 2024-2028.
Lampen concluded that the market’s response to Roblox’s fourth-quarter results was an overreaction, viewing it as a mismatch of expectations rather than indicative of fundamental issues within the company. With the first quarter of 2025 showing promising signs, BTIG supports investing in Roblox during the current weakness, considering the company a top pick among traditional gaming stocks covered by the firm. With a market capitalization of $42.96 billion and current technical indicators suggesting overbought conditions, investors seeking detailed valuation analysis can access the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, Roblox Corp. has been the subject of various analysts’ updates. Benchmark analyst Mike Hickey raised the price target for Roblox to $71, maintaining a buy rating, following the company’s strong fourth-quarter performance. Similarly, BofA Securities increased its price target from $70 to $79, keeping a buy rating on the stock. On the other hand, BTIG analyst Clark Lampen increased the price target to $66 while maintaining a buy rating, citing positive indicators such as new account growth and strong gift card purchase trends.
HSBC initiated coverage on Roblox shares with a buy rating and a price target of $63, indicating a positive shift in the company’s economic outlook and market potential. In further developments, the disbanding of Hindenburg Research, known for its critical reports, led to a slight increase in Roblox’s stock, among others. These updates reflect recent happenings and analyst insights on Roblox Corp.
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