Roblox (RBLX) Stock Forecast & Price Target

Roblox has demonstrated strong financial performance, surpassing 3Q estimates with bookings increasing by approximately 20% and EBITDA by around 40%, resulting in upward revisions for 4Q projections. The company experienced a remarkable 97% year-over-year growth in sign-ups during 3Q, with consistent sequential growth outpacing previous quarters, indicating robust user engagement across its platform. Furthermore, Roblox is well-positioned for future growth, benefiting from significant data advantages and sustained demand, as evidenced by guidance predicting nearly 50% bookings growth, significantly exceeding the long-term target of 20%.

Roblox is projected to experience margin contraction, with a decrease of approximately 100 basis points year-over-year anticipated for 2026. Despite an initial assumption of a significant sequential decline in bookings, the actual decline observed has been more moderate, suggesting potential growth in the high 70s for the quarter, though forecasts have been adjusted to reflect slower growth rates of 21.6% compared to previous estimates of 34.3%. Additionally, reduced covenant EBITDA estimates by 6% and a declining outlook for margins indicate ongoing financial challenges, compounded by various risks related to daily active user engagement, average revenue per user growth, and platform safety issues.