Roblox cut at BMO and Deutsche Bank as platform transition slows monetization

Investing.com -- Roblox was downgraded by both BMO Capital Markets and Deutsche Bank on Friday after a disappointing second-quarter report and outlook, with analysts warning its platform transition will take time to pay off and competition is mounting.

BMO analyst Brian Pitz cut the stock to Market Perform from Outperform and slashed his price target to $45 from $100.

He said a shift in engagement from 2025’s high-monetizing viral games into new and evergreen titles with lower hourly monetization drove a 2.5% bookings miss in the quarter, while third-quarter guidance came in 12.5% below the Street at the midpoint.

BMO expects "engagement/monetization pressure to continue over several quarters, especially in 4Q26E as GTA VI launches."

Deutsche Bank analyst Benjamin Black downgraded Roblox to Hold from Buy, lowering his target to $38 from $56.

He said the quarter "materially reduces near-term visibility," with bookings of $1,557 million finishing at the low end of guidance and about 3% below consensus.

Black noted Roblox guided to "the first y/y decline in company history" while withdrawing its full-year outlook, largely due to an April recommendation-algorithm change that sacrifices near-term monetization for retention.

Both firms still see a credible long-term path. Deutsche Bank said improved discovery, safety standards and growth among over-18 users can expand Roblox’s addressable market, while BMO flagged rising age-verification rates.

But both cut estimates, and Deutsche Bank expects shares to "remain range-bound until UCAN monetization stabilizes."

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