Roblox Stock (RBLX) Update: Base $170, Bull Case $300 At Morgan Stanley

Roblox Corporation (RBLX) is under scrutiny as optimistic analyst projections clash with emerging legal challenges concerning user safety on the platform. The stock's trajectory reflects this tension, balancing potential for substantial growth against the risks associated with ongoing litigation.

Markets witnessed a positive reaction to Morgan Stanley’s reiterated “Overweight” rating on Roblox, accompanied by a price target of $170. The firm's bull case presents a valuation of $300 per share, predicated on Roblox's potential to reach over one billion users by 2030. This bullish outlook mirrors the success of user-generated content platforms like YouTube and highlights Roblox’s strong position in artificial intelligence.

Similarly, JPMorgan Chase & Co. has increased its price target to $160, citing record platform engagement, including a peak of 32 million concurrent users. Games such as “Grow a Garden” have significantly contributed to this surge, driving increased bookings and a positive outlook.

The company's financial performance in the second quarter of 2025 further bolsters this optimistic view. Roblox reported net bookings of $1.44 billion, a 51% year-over-year increase, exceeding analyst expectations. Daily active users reached 111.8 million, a 41% increase from the previous year, and total engagement hours rose by 58%.

These metrics showcase the platform's expanding user base and heightened engagement levels. Adding to the bullish sentiment, Roblox announced a new ad format and a partnership with Google to bolster its advertising business, potentially unlocking new revenue streams.

However, these positive indicators are tempered by escalating legal challenges. Kentucky Attorney General Russell Coleman recently filed a lawsuit against Roblox, alleging inadequate protection for children from predators.

The lawsuit emphasizes Roblox’s alleged deficiencies in age verification, content filters, and parental notifications, raising serious concerns about the safety of its predominantly young user base. Roblox has responded by highlighting its safety protocols, including AI moderation and strict chat filters, and reiterated its commitment to child safety.

This legal action follows similar lawsuits in Louisiana and Iowa, signaling a pattern of concerns regarding the platform's ability to safeguard its users. These legal battles introduce significant risks that markets are closely monitoring, as adverse outcomes could lead to substantial financial penalties, reputational damage, and increased regulatory scrutiny.

Analysts remain divided, weighing the company’s growth prospects against the potential impact of ongoing legal proceedings. The outcome of these lawsuits could significantly influence market sentiment and the stock’s future performance. Stakeholders should carefully consider both the company’s growth potential and the implications of these legal challenges when evaluating Roblox's stock.

The contrasting forces of optimistic growth projections and looming legal risks have created a complex landscape for Roblox stock, potentially impacting its long-term trajectory.