Key Takeaways
- Citi downgraded Roblox to Neutral from Buy and kept its $55 target. It pointed to fading interest in the hit game Steal an Egg and to the launch of Take-Two Interactive’s Grand Theft Auto VI.
- Roblox’s own fourth-quarter guide doesn’t count on recent hits repeating, and it builds in a modest hit from GTA VI.
- Citi’s target is 7% above the Nov. 12 close and 10% above the consensus, while the stock trades at 4.9x forward sales, below its 5-year average of 7.7x.
- Neutral looks like the right rating, since analysts’ 2027 loss estimate is still widening while Roblox spends more on AI and on marketing to adults.
Roblox (RBLX) just lost one of its bulls. Citi analyst Jason Bazinet downgraded the stock to Neutral from Buy on Nov. 13 and kept his $55 price target, 7% above the Nov. 12 close of $51.42. The stock is down 51% from a year earlier, but it’s up 45% from its Aug. 12 closing low.
His case is about the next few months: Steal an Egg, this summer’s viral hit, is fading, and Take-Two Interactive (TTWO) launches Grand Theft Auto VI on Nov. 19.
A Summer Hit Is Cooling at Roblox
Steal an Egg didn’t stop Roblox’s daily users from falling 9% from a year earlier in the third quarter. Citi sees no new hit taking its place, and it expects GTA VI to pull attention and playtime away from Roblox. It thinks fourth-quarter bookings could land a bit below the middle of Roblox’s guide for a 10% to 15% drop. Take-Two, for its part, expects net bookings of $8.0 billion to $8.2 billion in its fiscal year ending March 2027, with GTA VI in it.
Roblox Already Planned for Both
CFO Naveen Chopra said on the call that some recent strength came from “big hit games that have grown quickly on the platform” and Halloween updates, adding, “for guidance purposes, we don’t assume that those things will necessarily repeat in the coming weeks.” The same guide, which sent the stock down 18% on Oct. 30, does “build in a modest headwind from the release of GTA in the quarter.” So the guide was already cautious on both worries.
TIKR Tracks 35 Analysts on Roblox. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Roblox, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Roblox’s Analyst Ratings
Does $55 Add Up?
Analysts have already done most of their cutting. The consensus target has fallen from $146 a year ago to $50, about where the stock trades.
Estimates fell with it. On March 31, analysts expected $10.2 billion of 2027 sales on a bookings basis; now it’s $7.85 billion.
At the Nov. 12 close, Roblox traded at 4.9x forward sales, under its 5-year average of 7.7x, though that average carries 2021’s 24.3x peak.
Citi’s $55 is still 10% above the average target, so the firm hasn’t turned bearish on the price.
Spending Is the Bigger Worry for Roblox
Roblox guides fourth-quarter adjusted EBITDA of negative $70 million to negative $10 million as it spends more on AI and on marketing to adults. And over the past 90 days, analysts’ 2027 loss estimate has widened to $1.31 a share from $1.16.
Neutral looks like the right rating to me. The stock isn’t expensive against its own history, but with estimates still slipping, there’s no rush to buy. Steal an Egg is the weaker half of Citi’s case, since Roblox’s guide does not rely on recent hit-driven strength repeating.
The fourth-quarter report early next year settles it: bookings at the top of the range and a first-quarter guide that gets EBITDA back above zero would make $55 look low.
So What Is Roblox Stock Actually Worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Roblox could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
