Roblox jumps as Wedbush calls it ‘most compelling growth opportunity’ in gaming

Shares of Roblox (RBLX) are on the rise on Monday after Wedbush said that notwithstanding a slew of recent and forthcoming hit pieces and legal action, it views Roblox as “the most compelling growth opportunity in the video game sector.” The firm cites management’s quick, decisive, and robust child safety response which “should assuage investor concerns;” the flywheel from recent hit games; developer incentives, infrastructure improvements, and AI-driven discovery that are driving massive platform growth; genre expansion and aging up, which increase potential ad inventory; and pricing optimization across games and regions, driving improved revenue streams. While Wedbush expects some ongoing volatility in Roblox’s share price when new hit pieces or legal action surface, it argues that Roblox continues to be quick to respond, with meaningful actions it has taken and plans to create a safe and engaging environment across its age cohorts. The firm has an Outperform rating on the shares with a price target of $165. Roblox is up about 8% at $126.72 in late morning trading.