Jefferies Downgrades Roblox to Underperform as Shares Slip

Overview

• Jefferies cut Roblox to an Underperform rating on Monday and kept a $38 price target, a call that the firm says reflects an over-optimistic view of future bookings growth.
• The stock fell about 4.6% in premarket trading on the downgrade, adding to a roughly 4.9% drop from the prior session after a 30% rally since late July.
• Jefferies argues bookings risk is key because Roblox records cash from Robux purchases as bookings immediately while accounting revenue is spread over the estimated life of paying users, so current spending patterns can show up in bookings before they appear in reported revenue.
• The firm flagged that a U.S. and Canada daily active user surge to roughly 26 million was driven by viral hits that largely churned, and it warned a new recommendation algorithm that favors long-term retention may slow near-term user growth.
• Wall Street remains split: Morgan Stanley still rates Roblox Overweight with a $55 target and the FactSet consensus sits near $49.34, leaving the next bookings and retention data as the principal test of Jefferies’ thesis and a key signal for investors and game developers.