Roblox Stock Surges 2% After Analyst Upgrades to Buy with $150 Price Target

Roblox (RBLX) stock rose 2% in pre-market trading after Wolfe Research analyst Shweta Khajuria upgraded it to a Buy from Hold with a price target of $150. The analyst cited higher contributions from regional pricing and advertising opportunities, increasing Fiscal 2026 bookings and earnings estimates by 7% and 13%, respectively. RBLX has a Strong Buy consensus rating on Wall Street with a 28% upside potential.

Title: Roblox (RBLX) Stock Upgrades: Analysts Optimistic Despite Safety Concerns

Roblox (RBLX) stock experienced a 2% increase in pre-market trading on July 2, 2025, following a positive upgrade by Wolfe Research analyst Shweta Khajuria. The analyst upgraded the stock to a "Buy" rating with a price target of $150, citing higher contributions from regional pricing and advertising opportunities. This upgrade comes as Roblox Corp (RBLX) has been facing significant safety concerns and regulatory scrutiny, which have led to a decline in stock price.

The analyst's optimistic outlook is supported by the company's robust growth and engagement metrics. Roblox has seen significant user base expansion, with gross bookings reaching $5.1 billion on a trailing-12-month basis as of June 30, 2025, marking a 34% increase from the previous year [1]. Additionally, the company's user engagement has shifted to become more social media-like, driving substantial growth.

Despite these positive factors, Roblox continues to face legal challenges and regulatory pressure. Louisiana Attorney General Liz Murrill filed a lawsuit against Roblox, alleging inadequate protection for children from online predators. This lawsuit, along with several others, has led to a decline in the stock price and regulatory scrutiny from various countries. The platform has been banned in several nations, including Turkey, Iran, and Qatar, due to these concerns [2].

Roblox has responded to these challenges by open-sourcing its AI system, Roblox Sentinel, to help detect potential child exploitation. The AI system has facilitated the submission of over 1,200 reports to the National Center for Missing and Exploited Children in the first half of 2025. Despite these efforts, the company continues to face legal challenges and regulatory pressure [3].

Despite the challenges, analysts remain bullish on the platform's growth potential. The consensus rating from analysts is "Outperform" with an average brokerage recommendation of 2.3. This rating reflects the company's prospects, with the scale ranging from 1, indicating a Strong Buy, to 5, signaling a potential Sell. Analysts believe that the company's strong financial performance and growth potential outweigh the current safety concerns [3].

However, it is essential to note that GuruFocus estimates suggest a potential downside of 21.09% from the current price of $116.57, indicating that the stock may be overvalued. This downside potential is based on the GF Value, which represents GuruFocus' estimation of the stock's fair value, derived from historical trading multiples, past business growth, and future performance projections [4].

In conclusion, Roblox Corp faces significant safety challenges and regulatory scrutiny, which have led to a decline in stock price. However, analysts remain bullish on the platform's growth potential, projecting a price range between $150 and $175. Despite potential downside based on GF Value estimates, the stock holds an "Outperform" status from analysts.

References:
[1] https://www.investing.com/news/analyst-ratings/td-cowen-raises-roblox-stock-price-target-to-77-from-54-keeps-sell-rating-93CH-4198051
[2] https://finance.yahoo.com/news/roblox-stock-tanks-surge-lawsuits-220349908.html
[3] https://www.gurufocus.com/news/3064817/roblox-rblx-faces-legal-challenges-amid-safety-concerns
[4] https://corp.roblox.com/newsroom/2025/08/more-on-removal-of-vigilantes-from-roblox