Balanced View on Roblox: Achievable Growth but Margin Constraints Justify Hold Rating and Lower $85 Target

Analyst James Heaney CFA of Jefferies maintained a Hold rating on Roblox, reducing the price target to $85.00.

James Heaney CFA has given his Hold rating due to a combination of factors that balance Roblox’s growth prospects with rising uncertainties. He notes that, despite the stock having already sold off sharply since strong 3Q25 results, investors remain focused on the risk that 2026 bookings growth may fall short of the company’s long-term 20%+ target. Concurrent user metrics stabilized in November and December, which reduces near-term risk to 4Q25 and early 2026 performance, but the drop from the August peak and questions around average revenue per user and seasonality temper confidence. Heaney also highlights that positioning is skewed cautiously, with many investors bracing for a conservative 2026 bookings outlook that could act as a near-term reset rather than a clear catalyst for upside.

At the same time, his modeling suggests that 20% bookings growth in 2026 is achievable, and he maintains solid underlying EBITDA expectations, which supports not moving to a Sell. However, management’s commentary around higher developer and infrastructure expenses in 2026 implies limited room for margin expansion unless growth materially exceeds 20%, constraining earnings leverage. This combination of credible but not spectacular growth, potential guide-down risk, and pressure on valuation multiples leads Heaney to reduce his price target to $85, based on a lower 30x multiple of FY26 EBITDA of $1.93B. Given these offsetting positives and negatives, he concludes that Roblox shares are appropriately valued at current levels, warranting a continued Hold recommendation.

In another report released today, Barclays also maintained a Hold rating on the stock with a $130.00 price target.