Roblox Stock (RBLX) Rallying as Price Target Trimmed

Roblox stock price (NASDAQ: RBLX) is rallying today, up 9.1% despite Morgan Stanley trimming their price target on RBLX. Not is all as it may seem at first glance however, with the revised price target of $155 suggesting a potential upside of 85% from here.

The price of Roblox shares has reversed trend today, as Morgan Stanley's decision to lower its price target on the stock from $170 to $155 raised a few eyebrows. Despite the cut, the firm maintains an “Overweight” rating on the shares, suggesting that it still sees considerable upside potential. 

Morgan Stanley believes the internet sector in 2026 will closely resemble 2025, with markets rewarding companies that demonstrate material positive returns on invested capital from generative AI or GPU-enabled technologies. Subsectors facing disruption uncertainty, such as rideshare and e-commerce, may trade at lower multiple bands. The firm views Roblox as a “clear leader” in next-generation entertainment platforms, drawing comparisons to the growth trajectory of user-generated content giants like YouTube. This perspective suggests a belief in Roblox's ability to capitalize on evolving technological trends and maintain a strong market position.

However, not all analysts share the same level of optimism. JPMorgan recently downgraded Roblox from “Overweight” to “Neutral,” reducing its price target from $145 to $100. This downgrade was driven by concerns about moderating engagement trends, an anticipated slowdown in bookings growth, and the potential for margin compression. These concerns highlight the risks associated with Roblox's growth prospects and its ability to sustain its current valuation.

Investor apprehension surrounding Roblox's upcoming age verification feature, which requires users to verify their age through a facial photo to access certain chat and social features, has also been a topic of discussion. Morgan Stanley believes that these concerns are misplaced and continues to support Roblox's strategic initiatives aimed at enhancing user safety and platform integrity. This stance suggests that the firm views these measures as necessary for the long-term health and sustainability of the platform.

Despite the mixed analyst sentiment, the recent rally in Roblox's stock price indicates that markets are currently leaning towards a more optimistic view of the company's prospects. The discrepancy between the two firms' price targets ($155 vs $100) demonstrates the divergence in opinion, and the market will continue to monitor the company's performance closely to determine its true valuation.