Roblox Stock Has Halved In 1 Year But This Analyst Sees Path For Continued Monetization Growth In US

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  • Needham analyst Bernie McTernan maintained Roblox Corp RBLX with a Buy and cut the price target from $55 to $53 after lower-than-expected August bookings caused him to reduce his estimates. 
  • He expressed his three key takeaways from the company's investor day.
  • He highlighted the commentary on advertising, which he saw as a substantial opportunity for RBLX.
  • He emphasized product enhancements, spinning the developer flywheel and enabling larger teams to create on RBLX.
  • He also acknowledged that "All ages engaging on the platform" is happening, as over 13 of the largest and fastest-growing demographic are engaged.
  • McTernan said RBLX is an evolving platform that is simultaneously growing internationally and shifting its age cohorts older. 
  • As such, the TAM is shifting from IAP from 5-12-year-olds in the U.S. to global gaming spending to broader entertainment, apparel, and advertising budgets. 
  • As a result, he still saw a path for continued monetization growth in the U.S. and expects international to catch up, similar to other entertainment companies.
  • Price Action: RBLX shares traded lower by 8.18% at $39.93 on the last check Friday.
  • Photo via Wikimedia Commons
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