TD Cowen maintained its Sell rating and $70.00 price target on Roblox Corp. (NYSE:RBLX) after the video game company released fourth-quarter results, citing concerns about player engagement trends and the risk that management's fiscal year 2026 guidance may be too optimistic.
The firm highlighted that Roblox's Q4 bookings were "almost exactly in-line" with its own estimates. Despite that operational alignment, TD Cowen pointed to engagement metrics that have weakened since a peak last summer and described trends since December as "very soft" relative to typical seasonal patterns.
Market data shows the stock trading at $61.28 and having fallen by nearly 8% over the prior week. InvestingPro data noted by analysts indicates the stock's relative strength index (RSI) is in oversold territory. Separately, InvestingPro figures also show Roblox has delivered revenue growth of 35.77% over the last twelve months.
TD Cowen characterized the company's FY26 outlook as "quite aspirational" when measured against current engagement performance. While the research team dismissed recent industry chatter that artificial intelligence alone will upend video game franchises - calling such fears "unwarranted" - it nonetheless warned of an "uncomfortably high" chance that Roblox could miss its guidance.
The firm described itself as "conflicted" on the stock, balancing constructive elements in the business against the tangible risk posed by a guidance miss. Ultimately, TD Cowen retained the Sell rating on the view that FY26 guidance remains "at-risk" and that continued weak engagement could create an "increasingly uncomfortable overhang" on the shares unless user activity rebounds.
Analyst moves after the quarter
Several other firms adjusted their views following Roblox's fourth-quarter results, reflecting a range of interpretations:
- Jefferies lowered its price target to $70, citing better-than-expected bookings and describing first-quarter bookings guidance as "likely conservative."
- Oppenheimer cut its target to $130 and noted that bookings of $2.22 billion beat consensus estimates and represented 63% year-over-year growth.
- UBS trimmed its price target to $74, explicitly pointing to concerns about competition from artificial intelligence within the gaming sector.
- Needham reduced its target to $105, attributing the move to a broad technology sector sell-off but remaining upbeat on Roblox's fundamentals.
- Freedom Capital Markets upgraded Roblox to a Buy rating while keeping its $85 price target, highlighting the current trading multiple as a factor.
These analyst adjustments present investors with differing lenses on Roblox's outlook: some focus on the strength in bookings and revenue growth, while others emphasize near-term execution risks tied to engagement and sector pressures from AI competition.
What this means for investors
TD Cowen's retained Sell call centers on the possibility that management's FY26 targets may be difficult to achieve without an uptick in engagement metrics. The varied responses from the analyst community underscore both the upside tied to robust bookings and revenue, and the downside risk if user activity continues to soften.