Investing.com -- Goldman Sachs analyst Eric Sheridan upgraded Roblox to Buy with a 12-month price target of $180, implying nearly 60% upside, citing “strong platform momentum” and a clear path toward “long-term revenue compounding and margin trajectory.”

In a note following the company’s third-quarter results, Sheridan said Roblox showed “strength in bookings, revenue and DAU growth,” with management expressing “a continued and rising sense of optimism surrounding the long-term scaling of the platform.”

The analyst added that while near-term margin guidance “disappointed relative to Street expectations,” increased investment in “AI, technical infrastructure and trust/safety initiatives” should reinforce Roblox’s competitive position.

Goldman pointed to “sustained momentum in terms of the growth of creators/developers” and a “widening out of the array of content available to users,” which it stated would drive audience expansion.

The firm also highlighted progress in discovery and engagement tools, noting that “changes made to Roblox’s display of experiences on the home page… have begun to drive a viral content flywheel.”

Goldman said monetization trends were improving, with “regionalized pricing” boosting payer conversion and “advertising continuing to scale on the platform,” as 18,000 creators used traffic-driving ads in the third quarter, up 27% from the prior quarter.

“We increasingly see more of a sustained upside node… as the company increasingly demonstrates the hallmarks of a consumer Internet/Media platform building on virality, content creation, distribution and monetization,” Sheridan wrote, comparing Roblox’s evolution to “the scaling of YouTube over the last 10+ years.”