UBS has lowered its price target on Roblox Corp. (NYSE: RBLX) to $74.00 from $103.00, while keeping a Neutral rating on the shares. The updated target remains higher than the current trading level of $60.57. InvestingPro data referenced by market observers shows the stock trading well below its 52-week high of $150.59.
The analyst-led downward revision arrives as Roblox shares have suffered notable declines. The stock fell roughly 20% since mid-last week amid heightened investor concern about competition from artificial intelligence in the gaming sector. InvestingPro figures further quantify the move, showing a 7.89% drop over the past week and a 54.85% decrease over the last six months. Technical indicators cited by the same data source suggest the shares may now be in oversold territory, based on the current relative strength index reading.
UBS analyst Christopher Schoell emphasized that corporate results and guidance that exceed expectations could prompt a favorable market response for Roblox. The company faces ongoing profitability challenges - InvestingPro data notes an EPS of -$1.52 over the trailing twelve months - but there is also an analyst consensus projecting robust sales growth for the company in the current year, a factor that could help underpin its growth narrative.
Despite that potential, UBS framed its view around the narrative risk posed by AI and the emergence of new platforms. The firm indicated that shifting the market's perception about those risks "could take time," a consideration that contributed to its decision to maintain a Neutral stance on the gaming platform operator.
Recent company-reported figures add nuance to the picture. Roblox posted fourth-quarter 2025 results that beat both revenue and adjusted earnings per share expectations. The company reported an EPS of -$0.45, which topped the consensus forecast of -$0.47, and recorded revenue of $2.22 billion versus an anticipated $2.07 billion.
Following the quarterly disclosure, several sell-side firms adjusted their price targets and ratings. Goldman Sachs trimmed its target from $180.00 to $140.00, citing the companys investment plans and an expectation of a moderated growth pace in the latter half of 2026. Needham reduced its price target to $105.00 from $159.00, attributing the change to a broader technology sector sell-off but retained a Buy rating on the shares. Freedom Capital Markets upgraded Roblox from Hold to Buy and left its $85.00 price target unchanged, signaling a more positive view despite the recent pullback. These moves illustrate a range of analyst perspectives on Roblox's path forward.
With mixed analyst reactions and a Neutral stance from UBS, Roblox's near-term performance may hinge on several measurable factors: upcoming quarterly results, management guidance, and the companys ability to address market concerns around AI-driven competition and potential new entrants. For now, UBS and other firms have balanced the company's recent beats against the strategic and narrative risks that investors are pricing into the stock.
Key points
- UBS lowered its Roblox price target to $74 from $103 and maintained a Neutral rating; current share price is $60.57.
- Roblox shares have tumbled amid AI competition concerns - roughly a 20% drop since mid-last week, 7.89% in the past week, and 54.85% over six months per InvestingPro data.
- Q4 2025 results outperformed expectations: EPS -$0.45 vs -$0.47 forecast and revenue $2.22 billion vs $2.07 billion expected.
Risks and uncertainties
- Heightened market concern over AI competition and the possibility of new platforms emerging could weigh on gaming and broader technology sector sentiment.
- Profitability remains a challenge - trailing twelve-month EPS of -$1.52 - which could constrain investor confidence until sustained improvement is demonstrated.
- Analyst sentiment and price targets vary, reflecting uncertainty about investment plans and growth pacing, which could lead to increased share price volatility.
These components underscore the mixed outlook surrounding Roblox: operational beats and expected sales growth exist alongside narrative and execution risks that market participants are actively assessing.