TD Cowen Raises Roblox Price Target Despite Maintaining Sell Rating
TD Cowen boosted its price target for Roblox Corp. (NYSE:RBLX) from $54.00 to $77.00 on Monday, although the company still has a Sell rating
Quick overview
- TD Cowen raised its price target for Roblox Corp. from $54.00 to $77.00 but maintains a Sell rating due to perceived overvaluation.
- Roblox's stock has seen significant growth, with a 189% return over the past year and a 78% increase in the last six months.
- S&P Global Ratings upgraded Roblox's rating to 'BBB-' due to improvements in user engagement and financial performance.
- Despite a lawsuit regarding child safety, Roblox has made its AI technology open source to enhance safety measures on the platform.
TD Cowen boosted its price target for Roblox Corp. (NYSE:RBLX) from $54.00 to $77.00 on Monday, although the company still has a Sell rating. The gaming platform’s stock has been on a roll, with an 189% return over the previous year and a 78% increase in the last six months.
The company’s study of engagement trends through mid-August showed that Roblox’s experience engagement dynamics have changed to be more like those on social media, which has helped growth a lot.
TD Cowen said that “Grow a Garden” was successful mostly because Roblox changed how it shows material to users, making it much easier for new experiences to go popular.
Not only is the virality clear on Roblox, but it’s also clear on other social media sites. The number of fresh hits creates its own momentum and makes the Roblox platform as a whole even more viral.
TD Cowen still thinks Roblox shares are too expensive, even if they raised their price target to what they call “street-high levels.” This is why they still have a Sell recommendation, even though the price target has gone up a lot.
Meanwhile, S&P Global Ratings has raised Roblox Corporation’s rating to “BBB-,” which shows that the company is growing quickly and doing well financially. The rating agency pointed out that the company’s user base, engagement, bookings, and free operational cash flow had all improved a lot.
Roblox’s gross bookings surpassed $5.1 billion on a trailing-12-month basis as of June 30. This is a 34% increase from the same time last year. Oppenheimer has also kept its Outperform rating on Roblox, even if there are still concerns regarding abuse on the platform. The price target is $158.00.
Louisiana Attorney General Liz Murrill has sued the corporation in court, saying that it failed to keep kids safe from cyber predators. Despite the lawsuit, Roblox has recently made its AI technology, Roblox Sentinel, open source in order to help find messages that could put kids in danger on digital platforms.
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