Roblox price forecast: BofA Securities sees a 25% upside

on Feb 14, 2022
  • BofA Securities resumes Roblox with a "buy" rating and a PT of $84 a share.
  • Analyst Omar Dessouky dubs Roblox a "category leader" in the metaverse space.
  • Shares of the gaming company are still down 50% from its ATH in November.

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Roblox Corporation (NYSE: RBLX) shareholders are not a happy lot at present, with the stock down nearly 50% from its high in mid-November 2021, but BofA Securities says a significant recovery could be right around the corner.

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Omar Dessouky resumes RBLX with a ‘buy’ rating

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BofA Securities’ Omar Dessouky on Monday resumed coverage of the stock with a “buy” rating and a price target of $84 a share that represents a 25% upside from here. Dubbing Roblox a “category leader” in the metaverse space, the analyst wrote:

Roblox has the potential to be a young tech giant as it appears to have the only fully-fledged metaverse product on the market. It can eventually encompass more than today’s investors can conceive.

Roblox is set to report its Q4 results on Tuesday. A strong and growing community of 50 million DAUs, 3 million creators, and over 3,000 paid developers gives a competitive edge to the gaming company, added Dessouky.

RBLX is also Jim Cramer’s top junior growth stock.

Why else does he like the stock?

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According to the BofA Securities’ analyst, Roblox will likely continue to beat sales growth estimates, thanks to its vertically integrated coding language that helps speed up product release. Dessouky noted:

Roblox controls its entire technology stack from coding language to graphics software to compute, including high-performance data centres and CDNs. The ownership of large-scale compute is notable as it offers Roblox a degree of freedom in attaining system performance leadership.

He has high hopes from the metaverse at large, which reminds him of now dominant platforms like social media in its early years.

Last week, Roblox partnered with the National Football League to launch NFL Tycoon – a metaverse game for users to hang out and engage in activities, including managing a football team. 

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