- Wednesday, October 16, 2024
Goldman Sachs analysts have upgraded the rating of Roblox stock following a strong quarterly earnings report. Eric Sheridan and his team at Goldman Sachs now rate Roblox stock as Neutral, up from Sell. They have cited the video game platform's expanding margins and improving business fundamentals as reasons for the upgrade.
In their Thursday report, the analysts raised their price target on Roblox stock to $48 from $35. They also increased their estimates for earnings and revenue, projecting positive growth through 2026.
According to the analysts, Roblox remains well-positioned in the gaming and interactive entertainment space. They also consider it to be an emerging player in the metaverse and creator economy themes.
Roblox posted a narrower loss of 52 cents per share in the fourth quarter, surpassing Wall Street's expectation of a 55 cents loss, as reported by FactSet. The company generated $750 million in revenue during the quarter, representing a 30% increase compared to the previous year.
Bookings on the Roblox platform, which measure sales of virtual currency, reached $1.13 billion in the fourth quarter. This figure indicates a 25% increase from the previous year.
Goldman Sachs highlights that Roblox's recent report reinforces the themes discussed during the company's fall investor day. This includes efforts to enhance monetization per user and maintain a focus on cost structure.
As of Thursday trading, Roblox stock was up 0.3% to $44.90.
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