Roblox Corp. (RBLX) PT Raised to $124 at BTIG

BTIG analyst Clark Lampen raised the price target on Roblox Corp. (NYSE: RBLX) to $124.00 (from $73.00) while maintaining a Buy rating.

The analyst comments "Approaching 2Q earnings season, we’re raising our Roblox estimates to reflect the beneficial near and medium-term impacts of Grow a Garden. In sum, we see upside to ‘25/26+ estimates and potentially faster run-rate Bookings growth, due to rising creator-side investment in the platform (capital + development resources) and a growing on-platform earnings opportunity. The holistic impact of those changes doesn’t seem fully evident in either consensus estimates, or the way the market has thus far chosen to capitalize an improving earnings outlook. Focusing first on the near-term benefits, our 2Q Bookings are now 3.8%/5.0% ahead of sellside consensus and guidance, respectively, driven by very strong DAU growth signals from our tracking. Our current +30.8% y/y Bookings forecast for 2Q25 is admittedly conservative, and data trends suggest potential for upside vs. our assumption -- sign-up trends point to >130M DAU, or 40-50%+ Bookings growth, though shifts in engagement and the impact to Bookings/DAU aren't captured with our tracking, and both could be dilutive. In addition, we see some benefit to overall bookings from regional pricing, and few incremental, variable costs outside of ITS + engineering to sustain a high quality user experience and further platform growth. Regarding regional pricing, the ability to test, optimize, and implement differential pricing by geography allows developers to effectively find, and price at, the asymptote for purchase conversion in each market. Launched in April, Roblox posts suggest a 4% increase in earnings for creators that ran pricing tests (perhaps a good proxy for top line impact), though we hesitate to extrapolate the impact across the full quarter, and haven’t explicitly factored in any initial benefit as a result. More detail on our tracking, estimate adjustments, and regional pricing is below, or in the body of our report. Beyond the near-term revision dynamics, our conversations with industry participants (i.e. established, traditional gaming companies/devs) suggest the ecosystem is beginning to take notice of a growing on-platform earnings opportunity. Fifteen months into the personalization/ engagement push, we believe Roblox is doing a better job of retaining users, surfacing interesting content, and slowly diversifying the Bookings base. That’s allowed for ~ $10-15M in monthly earnings for Grow a Garden’s dev/ownership team, per anecdotal feedback, and that level of earnings opportunity is likely to pull more developers to the platform. In a best-case scenario, we see potential for newer, more diverse, higher fidelity experiences and the reciprocal developer investment --> user investment --> developer investment flywheel turning at a faster pace. If we’re right, the mediumterm benefits of Grow a Garden are likely to outstrip the short-term revisions, and we’re comfortable raising the multiple on discounted EBITDA as a result. Why? Our 30x sits at the low end of a 30-40% medium-term EBITDA CAGR, and we believe there could still be upside to our ‘26+ bookings estimates (out years still adhere to Roblox’s ~20% run-rate growth target, though that may no longer be the appropriate benchmark). Bigger picture, Roblox’s goal of capturing 10% of the gaming market now seems more realistic to us, as Roblox already has 15-20% share of overall gaming time spent vs. less than 5% of industry Bookings. We expect the stock to continue working amidst a multiyear growth + revision cycle."

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