Keep an eye on beaten-down shares of Roblox (RBLX).
Still oversold, the stock picked up two bullish analysts.
Raymond James, for example, just initiated coverage with a strong buy rating, with a $41 price target. They like RBLX thanks to “1) long term shifts toward video gaming in young people’s entertainment time budget, with pandemic shifts more durable than not; 2) strong opportunities for RBLX to grow its user base in international markets and older (age 17-24+) cohorts; 3) relatively early stage of on-platform economy sophistication with revenue opps like advertising starting to be realized; 4) expansion potential into non-gaming areas like education; and 5) the ability to leverage generative AI to make the platform more attractive for creators, accelerating the creator/user content flywheel,” as noted by Investing.com.
Truist Securities also upgraded the stock to Buy, with a $37 price target.
“We’re upgrading RBLX to Buy as we see a path to 20% upside to consensus 2025 EBITDA driven by: 1) the core business; plus 2) immersive advertising; 3) new platforms; and 4) transition away from engagement-based developer subsidies; with 5) additional optionality (upside or cushion) around real commerce and/or AI-driven cost efficiencies.”