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On Friday, FBN Securities initiated coverage on Roblox Corp . (NYSE: NYSE:RBLX) shares, assigning a Sector Perform rating and setting a price target of $65.00. With a current market capitalization of $39.8 billion and impressive revenue growth of 28.7% over the last twelve months, the company has caught analysts’ attention. The research firm’s coverage began with the perspective that Roblox is well-positioned within the nearly $150 billion interactive entertainment (IE) total addressable market (TAM), which is currently growing at 6% annually. According to InvestingPro data, four analysts have recently revised their earnings estimates upward for the upcoming period.
The firm’s analyst cited Roblox’s robust and self-reinforcing business model as a key factor in its favorable positioning. While the company currently maintains strong cash positions and holds more cash than debt on its balance sheet, InvestingPro analysis reveals it’s not yet profitable, with an EBITDA of -$819 million in the last twelve months. The platform’s investment in enhancing the creator experience is expected to lead to an increase in high-quality creators and content, including the potential for A/AA studios to develop games on Roblox. This, in turn, is anticipated to drive user growth and better monetization opportunities, including as the user base ages up. The cycle of growth is seen as perpetuating, with more creators leading to more investment in the platform, thus sustaining the momentum.
In terms of financial projections, FBN Securities estimates that core user interactive entertainment bookings for Roblox could reach between $10.5 billion and $12.5 billion by the year 2034. These figures are based on assumptions regarding daily active user counts and market saturation. The company’s strong market performance, with a 55.8% return over the past year and a 34.7% gain in the last six months, suggests investor confidence in these growth prospects. Additionally, the analyst foresees a $2 billion opportunity in advertising revenue, drawing from multiple precedents and expecting higher margins in this area. Furthermore, a commerce marketplace represents a potential $3 billion opportunity, also anticipated to yield higher margins in the long term.
The analyst’s commentary highlighted the company’s potential for sustained growth and expansion within its market. The report detailed expectations of Roblox’s continued investment in its platform, which is believed to enhance the creator experience and, by extension, attract more users and creators to the platform.
Roblox Corp., known for its online platform that allows users to create and play games, has become a significant player in the interactive entertainment space. The company’s stock performance and future prospects are closely watched by investors as it continues to evolve and expand its offerings in the rapidly growing gaming market.
In other recent news, Roblox Corporation’s fourth-quarter results revealed net bookings in line with consensus estimates, while its adjusted EBITDA exceeded Wall Street expectations. However, the company’s daily active users fell short of projections, and its 2025 bookings guidance was slightly below analyst expectations. Citi analysts adjusted their price target for Roblox to $78, down from $82, while maintaining a Buy rating, reflecting a positive outlook on the company’s future financial performance. Benchmark analysts also reaffirmed a Buy rating with a $71 price target, citing Roblox’s strategy for market share expansion through AI-assisted creation, robust monetization, and broad user engagement. BMO Capital Markets maintained an Outperform rating with a $75 price target, emphasizing the platform’s extensive user base and unique game development environment. Oppenheimer analysts retained a Perform rating following an increase in user engagement during "The Hunt: Mega Edition" event, highlighting a 27% year-over-year growth in average concurrent users. Meanwhile, Roblox is under investigation by the US Securities and Exchange Commission, as confirmed by Bloomberg News, although specific details of the probe remain undisclosed. Roblox has not commented on the investigation, and the SEC has also refrained from further remarks.
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