Analyst Brian Pitz from BMO Capital reiterated a Buy rating on Roblox and keeping the price target at $150.00.
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Brian Pitz has given his Buy rating due to a combination of factors that highlight Roblox’s potential for growth and innovation. One of the key reasons is the company’s recent decision to increase the developer revenue share for the first time in eight years, which is expected to attract more developers and expand the creative community. This move is anticipated to accelerate the scaling of the business, despite a slight increase in Developer Exchange Fees.
Additionally, the introduction of Roblox Moments, a short-form video app, is seen as a significant opportunity to enhance user engagement and drive advertising revenue. The app, similar to TikTok and YouTube Shorts, is designed to help users discover new experiences on the platform, potentially boosting the advertising business. Furthermore, the growing use of Ads Manager and Rewarded Ads indicates a promising future for ad monetization. Overall, these strategic initiatives, coupled with a focus on safety and platform optimization, position Roblox well for long-term growth in the gaming market.
Pitz covers the Communication Services sector, focusing on stocks such as Alphabet Class A, Roblox, and Trade Desk. According to TipRanks, Pitz has an average return of 20.1% and a 74.30% success rate on recommended stocks.
In another report released today, Needham also maintained a Buy rating on the stock with a $159.00 price target.