Why Roblox Stock Price Jumped on Tuesday

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published April 23, 2024
Roblox app on a smartphone screen

Sheldon Cooper / SOPA Images / LightRocket via Getty Images

Key Takeaways

  • Roblox shares jumped nearly 4% Tuesday after JPMorgan analysts upgraded the online gaming platform's stock and raised its price target.
  • The bank boosted its rating on Roblox to "overweight" from "neutral," and increased the price target by $7 to $48.
  • JPMorgan analyst Cory Carpenter said that with investors hesitant to buy shares, Roblox was at a "compelling entry point."
  • Despite Tuesday's gains, Roblox shares are down 21% so far this year.

Shares of online gaming platform Roblox (RBLX) advanced Tuesday after JPMorgan analysts upgraded the stock, saying hesitancy by investors to jump in presented a “compelling entry point.”

Roblox shares finished 3.8% higher at $36.29, after moving as high as $37.52 during Tuesday's session. Despite the gain, the stock has lost 21% of its value since the start of the year.

Roblox YTD share price chart

TradingView

Analyst Cites Growing Bookings, New Revenue Streams

JPMorgan said it had raised its rating to "overweight" from "neutral," and boosted the price target to $48 from $41.

Analyst Cory Carpenter wrote that investors have remained skeptical about the company’s execution, and that its third-party data has been mixed in recent months. Because of that, JPMorgan sees a good opportunity to put money into “a company growing bookings ~20%+, exiting a heavy investment cycle, and ramping two new revenue streams in advertising (2H24) & commerce (2025).”

He added that the “crux of our bull thesis” is based on the belief that Roblox has a significant monetization opportunity and that the management is focused on margin leverage.

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  1. JP Morgan. "Roblox - Upgrading to Overweight Following Assumption of Coverage."

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