Roblox (NYSE:RBLX) Stock Price Target Cut by Wedbush

Key Points

• Wedbush lowered Roblox’s price target from $55 to $52 while maintaining a neutral rating, implying 24.42% upside from the reported $41.80 share price.
• Analyst sentiment remains cautious: Roblox has a consensus “Hold” rating and an average price target of $53.46, with several brokerages recently downgrading the stock.
• Roblox beat quarterly loss expectations, but revenue missed estimates and user engagement weakened, with daily active users down 9% year over year and engagement hours down 15%, contributing to a sharp share-price decline.

Roblox (NYSE:RBLX - Get Free Report) had its price target lowered by investment analysts at Wedbush from $55.00 to $52.00 in a report issued on Friday, Benzinga reports. The brokerage currently has a "neutral" rating on the stock. Wedbush's target price indicates a potential upside of 24.42% from the company's current price.

A number of other brokerages have also recently commented on RBLX. Wells Fargo & Company cut shares of Roblox from an "overweight" rating to a "cautious" rating in a report on Monday, October 12th. BMO Capital Markets downgraded shares of Roblox from an "outperform" rating to a "market perform" rating and set a $45.00 price objective for the company. in a research report on Friday, July 31st. JPMorgan Chase & Co. raised their price objective on Roblox from $40.00 to $53.00 and gave the company a "neutral" rating in a research note on Wednesday, October 14th. Benchmark downgraded Roblox from a "hold" rating to a "sell" rating and set a $33.00 target price on the stock. in a research report on Friday, July 31st. Finally, Deutsche Bank Aktiengesellschaft downgraded Roblox from a "buy" rating to a "hold" rating and lowered their price target for the stock from $56.00 to $38.00 in a research report on Friday, July 31st. One equities research analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating, thirteen have given a Hold rating and five have given a Sell rating to the company. According to data from MarketBeat.com, Roblox presently has a consensus rating of "Hold" and an average price target of $53.46.

Roblox Stock Performance

Shares of NYSE RBLX traded down $10.66 during midday trading on Friday, hitting $41.80. 18,666,062 shares of the stock traded hands, compared to its average volume of 11,715,016. The firm has a 50-day moving average of $46.25 and a two-hundred day moving average of $52.86. The firm has a market capitalization of $28.00 billion, a P/E ratio of -29.56 and a beta of 1.47. The company has a debt-to-equity ratio of 7.82, a quick ratio of 0.82 and a current ratio of 0.82. Roblox has a one year low of $33.88 and a one year high of $119.85.

Roblox (NYSE:RBLX - Get Free Report) last issued its quarterly earnings data on Thursday, October 29th. The company reported ($0.32) EPS for the quarter, topping the consensus estimate of ($0.43) by $0.11. Roblox had a negative return on equity of 292.85% and a negative net margin of 17.60%. The company had revenue of $1.57 billion during the quarter, compared to analyst estimates of $1.63 billion. During the same quarter in the previous year, the company posted ($0.37) earnings per share. Roblox's revenue was up 15.6% compared to the same quarter last year. On average, equities analysts forecast that Roblox will post -1.41 EPS for the current fiscal year.

Insider Activity at Roblox

In other Roblox news, CFO Naveen Chopra sold 17,509 shares of the company's stock in a transaction on Thursday, August 20th. The stock was sold at an average price of $37.96, for a total value of $664,641.64. Following the transaction, the chief financial officer owned 363,249 shares of the company's stock, valued at $13,788,932.04. This represents a 4.60% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO David Baszucki sold 52,568 shares of the stock in a transaction on Thursday, August 20th. The stock was sold at an average price of $37.96, for a total value of $1,995,481.28. Following the completion of the sale, the chief executive officer owned 799,646 shares in the company, valued at approximately $30,354,562.16. The trade was a 6.17% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 186,390 shares of company stock worth $7,283,371 over the last quarter. 10.05% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in RBLX. Basecamp Wealth Advisors LLC increased its position in shares of Roblox by 98.8% during the first quarter. Basecamp Wealth Advisors LLC now owns 507 shares of the company's stock worth $29,000 after acquiring an additional 252 shares during the period. Root Financial Partners LLC raised its position in Roblox by 100.7% during the 1st quarter. Root Financial Partners LLC now owns 564 shares of the company's stock valued at $32,000 after purchasing an additional 283 shares in the last quarter. Activest Wealth Management lifted its holdings in shares of Roblox by 72.9% in the 3rd quarter. Activest Wealth Management now owns 588 shares of the company's stock worth $25,000 after buying an additional 248 shares during the period. Western Wealth Management LLC bought a new position in shares of Roblox during the 1st quarter worth $33,000. Finally, Atlantic Private Wealth LLC bought a new position in shares of Roblox during the 1st quarter worth $35,000. Hedge funds and other institutional investors own 94.46% of the company's stock.

Key Roblox News

Here are the key news stories impacting Roblox this week:

• Positive Sentiment: Roblox reported a third-quarter loss of $0.32 per share, better than the analyst consensus loss of $0.43. Revenue increased 15.6% year over year to approximately $1.57 billion, although it fell short of estimates near $1.63 billion. Roblox Stock Sells Off Despite Q3 Earnings Beat: Details
• Positive Sentiment: Gross profit rose faster than revenue, and operating cash flow remained positive at about $395 million. These figures provide some support for the long-term profitability story despite the continuing net loss.
• Neutral Sentiment: The earnings-driven selloff extended beyond individual shareholders, affecting exchange-traded funds and other gaming-related companies with Roblox exposure. This indicates that the report is being treated as a broader signal about consumer engagement in interactive entertainment. Roblox Just Sank 15.48%. Here's What It Means for Your ETFs
• Negative Sentiment: Daily active users fell 9% year over year to 138 million, marking Roblox’s first reported annual decline in this metric. Engagement hours dropped 15% to 34 billion, raising concerns about slowing user retention and monetization. Roblox Narrows Loss as User, Engagement Metrics Fall
• Negative Sentiment: Management’s fourth-quarter bookings outlook was viewed as weak, overshadowing the quarterly bookings and earnings beats. Investors are also concerned that the anticipated release and marketing cycle surrounding GTA VI could compete for players’ attention during the holiday period. Roblox Plunges as Daily Users Shrink and GTA VI Clouds Holiday Outlook
• Negative Sentiment: Additional overhangs include continuing losses, elevated liabilities, reported insider selling, and scrutiny from short sellers and shareholder attorneys regarding user metrics and platform safety. These issues may reinforce investor concerns about Roblox’s valuation and execution risk.

Roblox Company Profile

Roblox Corporation operates Roblox, an online platform where users can create, publish, and participate in interactive digital experiences. The platform supports a broad range of user-generated content, including games, social spaces, entertainment, educational activities, and virtual events.

Roblox provides development tools through Roblox Studio, enabling creators and developers to design experiences and build virtual items and environments. Users can customize avatars, communicate with others, and access content across computers, mobile devices, consoles, and other supported platforms.

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