Oppenheimer Upgrades Roblox to Outperform Amid $6.5B Market Cap Drop

Oppenheimer has upgraded Roblox Corp to an 'Outperform' rating with a price target of $70, viewing the recent stock decline, which saw a 24% drop since February, as a strategic entry point for long-term investors. The firm anticipates significant revenue growth from programmatic video ads, projecting a run-rate of $100 million by late 2025. Strong user engagement metrics, with a reported 30% year-over-year growth in average concurrent users, bolster confidence in the company's performance. Oppenheimer also highlights Roblox's innovative event strategy, which has achieved all-time records for concurrent users, and its overall potential for sustainable growth. Additionally, institutional ownership of Roblox is substantial, with 69% held by institutions, indicating their significant influence over the stock price. This high level of institutional interest reflects a level of credibility and confidence in Roblox's future prospects, despite the risks associated with such concentrated ownership.