Roblox Analyst Turns Bullish As 'Trends Appeared To Materially Pick-Up In March'

Roblox Corp RBLX has been ramping up its efforts to attract new advertisers to its platform.

The stock has been rangebound over the past couple of years, despite the company having addressed many of the investor concerns, according to JPMorgan.

The Roblox Analyst: Cory Carpenter upgraded the rating for Roblox from Neutral to Overweight, while raising the price target from $41 to $48.

The Roblox Thesis: The company has generated over 20% bookings growth in each of the past four quarters and management is targeting 100 to 300 basis points (bps) of annual margin expansion over the next three to five years, Carpenter said in the upgrade note.

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"Third-party data suggested RBLX was tracking below its bookings guide through February, but trends appeared to materially pick-up in March," the analyst wrote. He added that the company could report first-quarter bookings of $927 million, representing 20% year-on-year growth, and adjusted EBITDA of $75 million.

"We do not anticipate any change to the 2024 Bookings guide of $4.14-4.28B (20% Y/Y) this early in the year and ahead of the seasonally important 2H," Carpenter further stated.

RBLX Price Action: Shares of Roblox were up 5.06% to $36.70 at the time of publication on Tuesday.

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Photo courtesy of Roblox.