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Investing.com -- Roblox (NYSE:RBLX) reported new user records in August, but Jefferies remains cautious on the stock despite the strong engagement trends.
In a note following the company’s Roblox Developers Conference (RDC), Jefferies reiterated its “hold” rating and $126 price target, citing concerns over profitability and long-term monetization strategies.
The brokerage acknowledged Roblox’s momentum, with peak users hitting record levels during overlapping events from two of its top three experiences.
The company also announced several new initiatives, including Roblox Moments, a short-form video discovery feed, an 8.5% increase in developer exchange payouts (DevEx), and improved AI creation tools.
Jefferies said these features could drive user engagement and platform growth but stressed that they also come with margin pressures.
Jefferies raised its fourth-quarter bookings estimate to $1.87 billion, reflecting a 16% quarter-over-quarter increase, but noted that higher DevEx costs will limit profitability gains.
The brokerage now projects a fourth-quarter EBITDA margin of 28.4%, up just 34 basis points year-over-year, with 2026 EBITDA guidance unchanged at $1.87 billion.
Analysts flagged that while Roblox continues to show sustainable 20%+ bookings growth through international expansion and aging-up of its user base, key risks remain.
These include uncertainty around building a meaningful advertising business, the company’s ability to maintain high long-term margins, and challenges in scaling engagement beyond its core demographic.
At a closing price of $127.69, Roblox’s shares are trading slightly above Jefferies’ $126 target.