Roblox Corp's (NYSE:RBLX) upbeat quarterly results reignited optimism about its growth potential, partially offset by management's cautious tone on 2026. However, the company's surging user-generated content and rapid adoption of AI-driven tools continue to intrigue investors.
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Needham analyst Bernie McTernan reiterated Roblox with a Buy and a $159 price forecast.
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McTernan rerated following the company's better-than-expected third-quarter results but noted management's cautious 2026 commentary could limit upside momentum. The analyst expects Roblox's 2026 EBITDA to come in just under $1.9 billion, making it the central debate for investors — balancing the strong 2025 bookings inflection against limited visibility for 2026 financials due to the platform's reliance on user-generated content.
He projects 20% bookings growth to roughly $8 billion in 2026, as it launches new tools and technologies for developers in the first half of the year.
McTernan also acknowledged potential headwinds from safety feature updates that could slow engagement.
Though Roblox management guided to modest margin contraction in 2026, the analyst noted much of the company's infrastructure and personnel expenses as fixed, implying that stronger bookings growth could ultimately lift margins.
He emphasized Roblox's position as a major AI beneficiary, citing the platform's collection of more than 30,000 years' worth of multimodal human interaction data each day — a massive data advantage that should enhance AI-driven tools for creators and improve engagement quality. This extensive dataset, McTernan said, enables Roblox to develop advanced generative features that reinforce its competitive moat and market leadership in immersive digital experiences.
The analyst highlighted Roblox's third-quarter earnings beat, which exceeded Needham's estimates by about 20% on bookings and 40% on EBITDA, leading to raised forecasts for the fourth quarter. He now models fourth-quarter bookings and EBITDA up 20% and 30%, respectively, near the midpoint of company guidance.
For fiscal 2026, McTernan trimmed his bookings growth forecast to 21.6% from 34.3% and lowered his covenant EBITDA estimate by 6%, assuming a 60-basis-point margin decline versus the previously projected 220-basis-point increase.
McTernan projected fourth-quarter revenue of $1.38 billion and fiscal 2025 revenue of $4.85 billion.
RBLX Price Action: RBLX stock was trading down by 0.56% to $112.37 at publication on Friday.
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