BMO Capital raised the firm’s price target on Roblox (RBLX) to $160 from $150 and keeps an Outperform rating on the shares. The firm is positive on the rise of UGC video game developers and the attractive economics they offer to incentivize Creators to build on their platform, the analyst tells investors in a research note. BMO adds however that Roblox’s recent increase in developer share is likely a one-time event rather than an annual trend. and competitive pressures could force Roblox to further shift economics towards developers over time. The firm also notes that as investments in infrastructure, trust, and safety moderate, significant operational leverage will allow Roblox bookings to grow faster than costs.
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