Roblox Corporation(NYSE:RBLX) shares are trading lower Monday after Jefferies downgraded the stock to Underperform from Hold, arguing its 30% rally since second-quarter results reflects overly optimistic expectations for bookings over the next 12 months.
- Roblox stock is feeling bearish pressure. What’s pressuring RBLX stock?
Why Jefferies Turned Bearish on Roblox
According to Investing.com, Jefferies kept its $38 price target, implying 18% downside from current levels. AnalystJames Heaney said he supports Roblox’s push into new game genres and adult users but believes “the improvement in U.S. & Canada user and Bookings growth will be longer and more costly than the market expects.” Daily active users in the U.S. and Canada rose from about 20 million in early 2025 to a peak of 26 million in the third quarter of 2025, growth Jefferies attributed mostly to viral hits such as Grow a Garden and Steal a Brainrot that lost players quickly. The firm said Roblox’s new algorithm favors games that retain players over the long term, which it expects will limit user growth in coming quarters.
Jefferies forecasts 5% bookings growth in fiscal 2027, well below the Wall Street estimate of 13%, and cut its own fiscal 2027 bookings estimate by 6% and its EBITDA estimate by 21%. “One of our key concerns is that Roblox will need to sustain elevated investment levels despite slowing bookings growth,” Heaney wrote, comparing Roblox to Meta between 2017 and 2019, when higher spending squeezed margins as revenue growth slowed.
Roblox Shares Fall
RBLX Price Action: At the time of publication, Roblox shares are trading 4.69% lower at $44.26, according to data from Benzinga Pro.
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