Roblox stock outlook not as bad as feared, Raymond James says

Investing.com - Raymond James offered reassurance on Roblox (NYSE:RBLX) following a management call, suggesting the company’s 2026 outlook "is not as bad as investors’ worst fears" despite vague forward guidance. This comes as Roblox shares have delivered an extraordinary 210% return over the past year, though InvestingPro data indicates the stock is currently trading above its Fair Value.

The investment firm noted that while Roblox only indicated growth would moderate after an "extremely strong 2025," the lack of specific quantification in the shareholder letter has allowed investor concerns to escalate. Raymond James believes there is "a decent amount of conservatism" built into the outlook and maintains that 20% year-over-year growth represents a floor for potential outcomes. For context, Roblox has demonstrated robust revenue growth of 27.39% over the last twelve months, according to InvestingPro data.

Roblox management identified two major uncertainties affecting its 2026 outlook: the extent to which 2025’s tailwinds will continue and the unknown impact of planned safety initiatives. Raymond James pointed to the typically strong correlation between fourth-quarter performance and first-quarter results of the following year, suggesting momentum should continue at least into early 2026. Investors should note that Roblox’s next earnings report is scheduled for October 30, 2025, which may provide additional clarity on these uncertainties.

Regarding safety measures, the firm acknowledged that new friction points like "AI-powered selfie age estimation" could increase user churn. However, Raymond James emphasized that "content strength will be the ultimate determinant" of user engagement with the platform. InvestingPro analysis reveals that Roblox stock movements are quite volatile, with the price currently 25% below its 52-week high of $150.59. InvestingPro offers 8 additional tips about Roblox that could help investors navigate this volatility.

The analysis also addressed margin concerns, noting that developer exchange (DevEx) spending, rather than infrastructure costs, appears to be the "main culprit for margin delever" expected in 2026. Raymond James views these investments as strengthening Roblox’s position as "the go-to platform for independent developers" and building network effects ahead of competitors. This investment approach comes despite Roblox not being profitable over the last twelve months, with an EBITDA of -$854.87 million. Analysts do not anticipate the company will be profitable this year, with EPS forecasts for 2025 at -$1.58.

In other recent news, Roblox Corp reported its third-quarter 2025 earnings, showcasing a notable revenue increase and a smaller-than-expected loss. The company achieved an earnings per share (EPS) of -0.37, surpassing the forecasted -0.49. Revenue reached $1.92 billion, exceeding expectations set at $1.68 billion. Despite these financial achievements, the stock experienced a decline in pre-market trading. Raymond James maintained its Outperform rating on Roblox, highlighting strong performance in daily active users, hours engaged, and bookings. BofA Securities reiterated its Buy rating and increased its EV/EBITDA multiple from 40x to 47x, citing potential for greater EBITDA growth after the investment cycle. These developments indicate that analysts remain optimistic about Roblox’s future prospects.

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