Roblox Earns Investment-Grade Credit Rating from S&P, Boosts Growth Potential

Roblox has achieved its first investment-grade credit rating from S&P Global Ratings, upgrading from BB+ to BBB- due to strong user growth, rising gross bookings, and healthier cash flow. This move highlights its success in attracting older players and could lower borrowing costs. Analysts have a Moderate Buy consensus rating with a $142.10 average price target, implying 12.1% upside potential.

Roblox, the popular online gaming platform, has achieved a significant milestone by receiving its first investment-grade credit rating from S&P Global Ratings, upgrading from BB+ to BBB-. This upgrade reflects Roblox's robust growth trends, rising gross bookings, and healthier free operating cash flow (FOCF).

The upgrade is a testament to Roblox's strong user base expansion, with the company reporting more than 111 million daily active users as of June 30, 2025, up from 50 million at the end of 2021 [1]. This growth has been driven by diversifying the user base geographically and by age cohort, with a focus on attracting an older demographic that spends more on the platform [1].

S&P Global Ratings expects Roblox to raise its gross bookings to $5.9 billion in 2025 and $7.3 billion in 2026, while its FOCF is projected to improve to $1.2 billion this year and $1.4 billion next year [1]. The positive outlook from S&P Global suggests that the company's ratings could be raised further over the medium term.

The upgrade to an investment-grade rating may lower Roblox's borrowing costs and open the door to institutional investors, potentially providing further capital for growth and expansion. This development comes at a time when Roblox's stock has doubled in 2025, with analysts maintaining a Moderate Buy consensus rating and an average price target of $142.10, implying a 12.1% upside potential [2].

However, Roblox faces challenges beyond its financial performance. The company recently suspended the account of YouTuber RealSchlep, who had been exposing alleged predators in Roblox. The platform accused Schlep of violating safety rules and interfering with its established safety protocols. This incident has sparked a debate over the balance between safety and community action in online gaming platforms [2].

Despite these challenges, Roblox's credit rating upgrade signals a positive development for the company and its investors. The upgrade is a recognition of Roblox's strong fundamentals and growth prospects, which may attract further investment and support the company's continued expansion.

References:
[1] https://seekingalpha.com/news/4484875-sp-global-ups-rating-on-roblox-to-bbb
[2] https://m.economictimes.com/news/new-updates/roblox-suspends-youtuber-realschleps-account-after-viral-predator-catch-operation-says-he-is-being-punished-for-it/articleshow/123261209.cms