Key Stats for Roblox Stock
- Price Change for Roblox stock: -6.40%
- $RBLX Share Price as of Jan. 6: $76
- 52-Week High: $151
- $RBLX Share Price Target: $139
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What Happened?
Roblox (RBLX) stock dropped over 6% after TD Cowen cut its price target to $70 from $77 while maintaining a “Sell” rating.
The downgrade came after analyst Doug Creutz highlighted a concerning deceleration in platform engagement during December, with hours spent in Roblox experiences growing just 74% year-over-year, down sharply from 99% growth in November and 110% in October.
The slowdown accelerated as the month progressed. By the final week of 2025, year-over-year growth had fallen to just 66%, marking the lowest percentage growth during a holiday season in at least four years.
This represents a significant red flag for a platform that has relied heavily on viral engagement to drive user acquisition and monetization.
TD Cowen slightly reduced its Q4 bookings estimate to $2.24 billion from $2.26 billion, though this still represents 65% year-over-year growth and remains above both consensus expectations and management guidance.
The firm attributed part of the deceleration to steep attrition in summer viral hits like Grow a Garden and tougher year-ago comparisons, though the drop-off was more severe than anticipated.
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What the Market Is Telling Us About Roblox Stock
The decline in Roblox stock signals growing investor concern about the company’s ability to sustain its explosive growth trajectory. While CEO David Baszucki recently celebrated reaching 3.2% of the global gaming market (up from 2.3% a year ago), the sharp month-to-month deceleration suggests the platform may be facing headwinds as it scales.
During the company’s recent Q3 earnings call, CFO Naveen Chopra warned investors not to expect specific 2026 growth guidance yet, noting potential headwinds from tough comparisons and new safety policies.
The company acknowledged that rolling out facial age estimation technology and raising the minimum age for restricted content to 18 could create “short-term friction to engagement and bookings,” even as management believes these measures will support long-term growth.
The engagement slowdown is particularly concerning given Roblox’s business model, which converts hours played into bookings through in-game purchases. While the company reported strong Q3 results with 151.5 million daily active users (up 70% year-over-year) and $1.92 billion in bookings (up 70%), the December data suggests momentum may be cooling faster than expected.
TD Cowen’s report also comes after JPMorgan recently downgraded Roblox stock from Overweight to Neutral, citing potential challenges in 2026. However, Morgan Stanley maintained its Overweight rating, dismissing concerns about the age verification feature that will require users to submit facial photos starting in 2026.
For Roblox stock investors, the key question is whether this represents a temporary pause as viral hits from summer fade, or the beginning of a structural slowdown as the platform faces tougher comparisons and regulatory headwinds.
Management’s decision to increase creator payouts by 8.5% and invest heavily in AI and infrastructure suggests confidence in the long-term opportunity, but the near-term growth trajectory appears increasingly uncertain.
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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 stocks mentioned. Thank you for reading, and happy investing!
