After gapping from about $40 to a low of $30 on poor earnings, Roblox is back to $37.77, where it’s still a buy. Initially, I’m looking for it to refill its bearish gap at $40. Longer term, I’d like to see the stock rally back to at least $45 on improving earnings.
Helping, recent earnings negativity appears to have been priced into the rebounding stock. Plus, analysts are bullish. Macquarie, for example, just initiated coverage of RBLX with an outperform rating, noting it’s one of the main “building blox” of the metaverse.
“In our view, there is still a long runway for growth ahead, driven by user growth, better monetization, international penetration and a new advertising initiative,” they added, as quoted by Seeking Alpha.
Moffett Nathanson also upgraded the stock to a neutral rating with a $26 price target following the massive sell off in the stock.
