Roblox Vs. Fortnite Rivalry: Analyst Confident In Roblox's Monetization Expertise
Portfolio Pulse from Anusuya Lahiri
Wedbush analyst Nick McKay has reiterated an Outperform rating on Roblox Corp (NYSE:RBLX) with a $53 price target. McKay expects Q4 upside for Roblox due to gift cards, new platforms, and product innovations. He acknowledges the risk from Epic Games' Fortnite but believes Roblox's monetization expertise and absence of Fortnite on mobile platforms limit the impact. McKay is optimistic about Roblox's long-term growth and margin expansion, citing upgrades to the game's economy, advertising opportunities, and cost discipline. His Q4 estimates for bookings and adjusted EBITDA are slightly different from consensus, and he expects Roblox to exceed margin levels. RBLX shares traded slightly lower at $39.11.
January 31, 2024 | 7:18 pm
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Wedbush analyst Nick McKay reiterates an Outperform rating on Roblox with a $53 price target, expecting Q4 upside and long-term growth despite competition from Fortnite.
The analyst's reiteration of an Outperform rating and a price target that is significantly higher than the current trading price suggests a positive outlook for Roblox's stock in the short term. The detailed analysis of Roblox's monetization strategies, product innovations, and potential for margin expansion contribute to the positive sentiment. However, the slight dip in share price on the last check indicates that the market may not have fully priced in this optimism, providing a potential upside if the analyst's expectations are met.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 100