What's Going On With Roblox Shares Wednesday?

Roblox Corporation RBLX shares are trading lower on Wednesday. Raymond James analyst Andy Marck downgraded Roblox from a Strong Buy rating to an Outperform rating and raised the price target from $81 to $130.

What To Know: The analyst said the sharp rise in expectations following the success of Grow A Garden prompted a downgrade to Outperform, citing a more measured trajectory for the stock.

The note acknowledged that Roblox's growth isn't solely reliant on one viral hit. It pointed to rising user engagement, improving retention, and other emerging games gaining traction — all of which suggest the platform is benefiting from broader strength.

"Grow A Garden is certainly helping matters, but the platform can be in good shape even if it declines," the analyst wrote.

However, the analyst also flagged several risks. Expectations may now be too high heading into the company's July 31 earnings report, which could limit upside. In addition, the note warned that viral games often fade quickly, and Grow A Garden may not deliver long-term momentum.

For the company’s second-quarter earnings, analysts estimate a loss of 36 cents per share and revenue of $1.21 billion.

Other analysts have also weighed in on the stock ahead of earnings. Citigroup analyst Jason Bazinet maintained a Buy rating on Roblox and raised the price target from $123 to $152. BMO Capital analyst Brian Pitz maintained an Outperform rating on Roblox and raised the price target from $95 to $135.

The consensus price target for Roblox is $89.74, with the highest rating of $152 and the lowest rating of $26.

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RBLX Price Action: At the time of writing, Roblox is trading 2.50% lower at $117.20, according to data from Benzinga Pro.

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