Overview
Needham has reduced its price target for Roblox Corp. (RBLX) to $105.00 from $159.00, while maintaining a Buy rating on the shares. The revised target still implies substantial upside relative to Roblox’s most recent trading price of $60.57. The stock has retreated about 60% from its 52-week high of $150.59 and has declined 7.89% over the last week.
Reasoning from Needham
The research firm said the primary driver behind the lower target multiple was the broad sell-off across the technology sector. Despite that sector-wide pressure, Needham signaled continued confidence in Roblox’s underlying business metrics. The firm also increased its adjusted EBITDA estimates for 2026 by 11% after Roblox provided guidance for bookings growth in the 22-26% range.
Needham noted that the company’s bookings guidance outpaced market concerns, particularly given that Roblox will be lapping 55% bookings growth in 2025. The firm highlighted two potential sources of additional upside that are not baked into current guidance: the possible emergence of viral game hits and the monetization potential tied to age verification features, the latter expected to add revenue opportunities without materially reducing user engagement.
Balance sheet and financial results
Recent financial data indicate Roblox holds more cash than debt on its balance sheet, a position Needham said provides flexibility amid current market volatility. The company reported fourth-quarter 2025 results that exceeded expectations: EPS of -$0.45 versus a forecasted -$0.47, and revenue of $2.22 billion compared with an anticipated $2.07 billion. Even with those beats, the shares fell amid broader market turbulence.
Industry context and further analyst moves
Needham plans to host an expert call on Project Genie featuring gaming industry veteran Frank Pape, and the firm flagged Google’s recent tech demo as one of the factors weighing on sentiment in the gaming space. Other broker activity following the earnings release included Freedom Capital Markets upgrading Roblox from Hold to Buy while maintaining a price target of $85, and Goldman Sachs trimming its price target to $140 from $180 while retaining a Buy rating. Goldman’s adjustment followed management commentary that bookings growth remained solid with momentum expected to continue into 2026, though at a slower pace in the latter half of the year.
Conclusion
Overall, Needham’s adjustment reflects a lower multiple driven by sectorwide weakness even as the firm raised near-term EBITDA expectations based on company guidance. The mix of positive operational signals and external market pressure has contributed to a dynamic and evolving analyst landscape around Roblox.
Note: This article presents reported analyst actions, company guidance and quarter results as described above and does not add new financial estimates or predictions beyond those disclosures.