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On Monday, Deutsche Bank (ETR:DBKGn) reiterated its Buy rating on Roblox Corp (NYSE:RBLX) shares with a price target of $78.00. The stock has shown remarkable momentum, delivering a 147% return over the past year and currently trading near its 52-week high of $82.02. According to InvestingPro analysis, the stock appears overvalued at current levels, with 14 key insights available for subscribers. The reaffirmation followed the announcement of Roblox’s new venture into Rewarded Video Ads, in collaboration with Google (NASDAQ:GOOGL). This feature allows users aged 13 and older to watch advertisements voluntarily in return for in-game benefits such as virtual currency and power-ups.
The partnership with Google will utilize Google Ad Manager and AdMob to broaden the reach of these ads, with plans to expand distribution in the near future. According to Deutsche Bank, the early indicators for this advertising model are promising, with high ad completion rates and positive user feedback. This initiative comes as Roblox demonstrates strong revenue growth, with InvestingPro data showing a 30.24% year-over-year increase in revenue to $3.84 billion.
Analysts at Deutsche Bank have forecasted that this move could significantly enhance Roblox’s revenue streams. They estimate that the Rewarded Video Ads could generate an additional $150 million to $300 million in advertising revenue by 2026. This potential increase would represent a 2% to 5% boost to the firm’s current revenue projections for the fiscal year 2026.
The financial implications of this new advertising feature could also positively impact Roblox’s earnings before interest, taxes, depreciation, and amortization (EBITDA). With a projected revenue share of 40% to 50% with content creators and a 20% commission to Google, the incremental EBITDA is estimated to be between $50 million and $120 million for FY26. This increase would translate to a 3% to 8% uplift to Deutsche Bank’s existing EBITDA estimates for the same period.
Roblox’s initiative to integrate Rewarded Video Ads represents a strategic move to diversify and strengthen its monetization strategies. The partnership with Google is expected to enhance Roblox’s advertising capabilities and provide a scalable solution to meet global demand. While the company maintains a strong balance sheet with more cash than debt, InvestingPro analysis indicates it’s not yet profitable, with a negative EBITDA of $771.37 million in the last twelve months. For deeper insights into Roblox’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Roblox Corp. has been the subject of several analyst updates following its robust first-quarter performance in 2025. Macquarie raised its price target for Roblox to $80, highlighting the company’s 31% revenue growth and increased daily active users, which reached approximately 98 million. Macquarie maintained an Outperform rating, noting the company’s resilience in a challenging macroeconomic environment. Canaccord Genuity also increased its price target to $84, maintaining a Buy rating, and praised Roblox’s strategic enhancements and partnerships, including one with Google, which are expected to boost its advertising ecosystem. Jefferies adjusted its price target to $70, retaining a Hold rating, and pointed out the broad-based improvement across Roblox’s top experiences.
Goldman Sachs revised its price target for Roblox to $80 while maintaining a Neutral rating, citing the company’s potential to maintain a compound annual growth rate of 22% for Bookings from 2024 to 2027. This revision reflects a reevaluation of Roblox’s medium-to-long-term business model drivers. Despite the impressive first-quarter results, Goldman Sachs maintained a cautious stance, balancing market risks and rewards at the current valuation. The company’s strategic initiatives, including differentiated Robux pricing and partnerships, were noted as contributing factors to its strong financial performance.
Overall, analysts have recognized Roblox’s significant growth and strategic initiatives, which have led to upward revisions in price targets and positive ratings from several firms. The company’s ability to adapt and expand across various genres and geographies has been a key factor in its continued success.
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