TD Cowen raises Roblox stock price target to $77 from $54, keeps Sell rating

Investing.com - TD Cowen raised its price target on Roblox Corp . (NYSE:RBLX) to $77.00 from $54.00 on Monday, while maintaining a Sell rating on the stock. The gaming platform’s shares have shown remarkable momentum, posting a 189% return over the past year and a 78% gain in the last six months.

The firm’s analysis of engagement trends through mid-August revealed that Roblox’s experience engagement dynamics have shifted to become more social media-like, which has substantially benefited growth.

TD Cowen noted that the success of "Grow a Garden" was primarily due to changes Roblox made to how content is surfaced to users, significantly enhancing the ability of new experiences to become viral hits.

The virality is visible not only on the Roblox platform but also on other social media platforms, with the scale of new hits generating its own momentum and driving added virality for the Roblox platform as a whole.

Despite raising estimates to what it describes as "Street-high levels," TD Cowen still believes Roblox shares are overvalued, leading to the maintained Sell rating despite the substantial price target increase.

In other recent news, Roblox Corporation has been upgraded to ’BBB-’ by S&P Global Ratings, reflecting its robust expansion and strong financial performance. The rating agency highlighted significant improvements in the company’s user base, engagement, bookings, and free operating cash flow. As of June 30, Roblox’s gross bookings reached $5.1 billion on a trailing-12-month basis, marking a 34% increase from the previous year. Additionally, Oppenheimer has maintained its Outperform rating on Roblox, despite ongoing concerns about platform abuse, with a price target set at $158.00. On the legal front, Louisiana Attorney General Liz Murrill has filed a lawsuit against the company, alleging failure to protect children from online predators. In response to safety concerns, Roblox has open-sourced its AI system, Roblox Sentinel, to help detect potential child endangerment communications across digital platforms. The AI system has reportedly facilitated the submission of approximately 1,200 reports of potential child exploitation to the National Center for Missing and Exploited Children in the first half of 2025. These developments highlight the company’s ongoing challenges and efforts in ensuring user safety while continuing to grow its platform.

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