As the gaming industry evolves at a rapid pace, companies are increasingly focusing on supporting their creative communities to drive growth and innovation. This trend is underscored by recent developments at Roblox Corp. (NYSE:RBLX), which hosted its annual Roblox Developers Conference (RDC) in San Jose on Saturday, sparking fresh insights from attending analysts.
- RBLX is trading at elevated levels. Check the fundamentals here.
Here are some takeaways from analysts who attended.
- BofA Securities analyst Omar Dessouky maintained a Buy rating, while raising the price target from $159 to $171.
- JPMorgan analyst Cory Carpenter reaffirmed an Overweight rating on the stock.
Check out other analyst stock ratings.
BofA Securities: Roblox raised the go-forward Developer Exchange (DevEx) payout rate to around 23.4%, signaling confidence in the company's growth and profitability, Dessouky said in a note. Since the company's EBITDA margin guidance for the fourth quarter already included an incremental $16 million DevEx, the latest figure suggests that the operating expense leverage and/or revenue growth "were too low," he added.
"We felt RBLX’s announced an excellent balance of features aimed at both supply side productivity and demand-side TAM expansion," the analyst wrote. Roblox could become the world's largest videogame platform if it reaches its goal of 10% market share of the global videogame industry by 2030, he further stated.
JPMorgan: While the press has been focused on platform safety, this was not an issue cited by developers, Carpenter said. Developer sentiment was "largely positive," he added.
The biggest news was a hike in developer payouts for the first time in eight years, the analyst stated. "Importantly, the developer payment increase was contemplated in prior guidance that implies no margin leverage in 2H," he further wrote.
RBLX Price Action: Roblox shares were down 0.27% at $127.34 at the time of publication on Monday. The stock is trading within its 52-week range of $37.50 to $150.59, according to Benzinga Pro data.
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