Goldman Sachs upgrades Roblox stock rating to Buy on growth potential

Investing.com - Goldman Sachs upgraded Roblox Corp. (NYSE:RBLX) from Neutral to Buy on Friday, while raising its price target to $180.00 from $155.00, matching the highest analyst target for the stock. The upgrade comes as Roblox shares have delivered an impressive 118% return over the past year, despite currently trading about 11% below recent highs.

The investment bank cited Roblox’s strong position to continue gaining market share within the interactive entertainment landscape, pointing to the company’s growing user count and engagement metrics as key factors in the upgrade decision. This growth trajectory is reflected in Roblox’s robust 27.4% year-over-year revenue growth, though InvestingPro data shows the company is trading at a notably high price-to-book ratio of 264.6.

Goldman Sachs highlighted recent partnership announcements with Alphabet and Shopify as evidence of Roblox’s ability to further monetize its expanding user base, particularly in markets outside the United States, Canada, and Mexico where advertising efforts will be crucial compared to payer conversion.

The firm also noted potential for improved user monetization in emerging markets through regional and dynamic pricing optimizations, while expressing confidence in Roblox’s 2026 advertising opportunity based on recent user trends across top experiences.

Goldman Sachs expects Roblox to sustain margin expansion and execute on targets established during the company’s 2023 Investor Day, despite recent negative stock reaction to the company’s margin commentary in its latest earnings report.

In other recent news, Roblox Corp reported its third-quarter 2025 earnings with a notable revenue increase and a narrower-than-expected loss. The company achieved a revenue of $1.92 billion, surpassing the anticipated $1.68 billion, and reported an EPS of -0.37, better than the forecasted -0.49. Despite these strong financial results, concerns about future margins remain. Raymond James reiterated its Outperform rating for Roblox, noting that the company’s results exceeded their near-top-of-Street estimates, with growth in daily active users and bookings. The firm also expressed that the company’s 2026 outlook might not be as concerning as some investors fear, maintaining a price target of $165. BofA Securities also maintained a Buy rating on Roblox, raising its EV/EBITDA multiple from 40x to 47x, citing potential for greater EBITDA inflection after the investment cycle. These developments highlight the mixed sentiment among analysts regarding Roblox’s future prospects.

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