Roblox (NYSE:RBLX) climbed after Jefferies upgraded the stock to buy from hold. The Wall Street firm said it’s confident the online gaming platform will continue to show strong growth in spite of macro pressures.
Analyst Andrew Uerkwitz raised his rating on Roblox shares to buy from hold and raised the per-share price target to $48, noting that revenue is growing, net bookings are expanding and user metrics are strong.
"With regular rollouts of new user and creator features, we are comfortable [Roblox] will grow through [near-term] competitor and macro pressures," Uerkwitz wrote in an investor note.
Delving deeper, Uerkwitz added that margins are at an "inflection point," coming closer to the 10% target that Roblox's management seemed to suggest at its analyst day.
The analyst also called Roblox "one of the best internet companies," given not only its fast growth in both users and net bookings, but the fact it is used as much as TikTok.
Even with Epic Games launching Fortnite creative 2.0 this weekend and the potential for a slowing economy or worse, Uerkwitz said Roblox is expected to keep growing in the "high teens" throughout 2023 and it's likely that Wall Street estimates will move higher and sentiment becomes more positive.
Last month, investment firm Benchmark upgraded Roblox citing strong fourth-quarter results and bookings, along improving January metrics .
RBLX shares faded 22 cents early Friday to $39.72.
