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Investing.com - TD Cowen maintained its Sell rating and $77.00 price target on Roblox Corp. (NYSE:RBLX) on Wednesday, despite acknowledging that its current estimates might be too conservative. The gaming platform, currently valued at $87 billion, appears overvalued according to InvestingPro’s Fair Value analysis.
The firm noted "continued strong engagement data" during the second half of the third quarter, suggesting that its current bookings estimates for both Q3 and especially Q4 are likely too low, even though they are already the highest on Wall Street.
TD Cowen has decided to leave its estimates unchanged for now, despite the strong engagement metrics that would typically warrant upward revisions.
The research firm expressed concern that Roblox’s overall engagement growth has become "highly dependent on what could be a boom-bust viral hit model," suggesting potential volatility in user metrics.
Despite the strong recent performance indicators, TD Cowen maintained its bearish stance, stating that it "still believe[s] that shares are overvalued" and therefore retained its Sell rating on the gaming platform company.
In other recent news, Roblox Corporation has been the focus of several notable developments. Moody’s Ratings has revised the company’s outlook to positive from stable, while affirming its Ba1 corporate family rating. This change reflects Roblox’s improving credit profile and strong operating performance, characterized by robust growth in users, engagement, and bookings. Meanwhile, BMO Capital has raised its price target for Roblox to $160, maintaining an Outperform rating, attributing the increase to strong engagement metrics. Piper Sandler also boosted its price target to $180, citing the platform’s enhanced ability to promote content and the viral success of experiences like "Steal a Brainrot."
Oppenheimer has reiterated its Outperform rating for Roblox, setting a price target of $158. This affirmation comes amid changes in Epic Games’ Fortnite economy, which could impact the competitive landscape. Additionally, Roblox announced the upcoming departure of Chief Product Officer Manuel Bronstein, effective at the end of September. Bronstein plans to pursue personal interests and entrepreneurial opportunities, and until his departure, he will continue to serve in his current role, receiving his regular salary and benefits. These developments collectively indicate a period of strategic adjustments and positive momentum for Roblox.
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