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Key Takeaways
- Roblox shares jumped nearly 4% Tuesday after JPMorgan analysts upgraded the online gaming platform’s stock and raised its price target.
- The bank boosted its rating on Roblox to “overweight” from “neutral,” and increased the price target by $7 to $48.
- JPMorgan analyst Cory Carpenter said that with investors hesitant to buy shares, Roblox was at a “compelling entry point.”
- Despite Tuesday’s gains, Roblox shares are down 21% so far this year.
Shares of online gaming platform Roblox (RBLX) advanced Tuesday after JPMorgan analysts upgraded the stock, saying hesitancy by investors to jump in presented a “compelling entry point.”
Roblox shares finished 3.8% higher at $36.29, after moving as high as $37.52 during Tuesday’s session. Despite the gain, the stock has lost 21% of its value since the start of the year.
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Analyst Cites Growing Bookings, New Revenue Streams
JPMorgan said it had raised its rating to “overweight” from “neutral,” and boosted the price target to $48 from $41.
Analyst Cory Carpenter wrote that investors have remained skeptical about the company’s execution, and that its third-party data has been mixed in recent months. Because of that, JPMorgan sees a good opportunity to put money into “a company growing bookings ~20%+, exiting a heavy investment cycle, and ramping two new revenue streams in advertising (2H24) & commerce (2025).”
He added that the “crux of our bull thesis” is based on the belief that Roblox has a significant monetization opportunity and that the management is focused on margin leverage.