Stifel initiates RBLX with a Buy and price target of $85. Analyst Drew Crum stated, “Roblox is an online platform, uniquely positioned at the intersection of content and social, two “viral loops” that provide a mutually reinforcing network effect, and together should drive higher engagement, and hence monetization.
Digital content creation and usage have emerged as one of the most popular forms of entertainment, which combined with Roblox’s large and growing ecosystem of users (30 million+) and developers (8 million+), bodes well for the company. The company has a recent history of impressive growth, with DAUs, hours engaged, and bookings increasing at CAGRs (2018-20) of +65%, +80%, and +94%, respectively.
To sustain this momentum, Roblox has a multi-faceted strategy to achieve a goal of “impacting” billions of users. And while we consider such initiatives in our model (i.e, international reach and age demographic expansion), none are fully contemplated.
In fact, our illustrative analysis for 2022 implies a range of outcomes with incremental bookings of $1.035 billion-$2.232 billion (vs. Stifel 2022E at $2.807 billion), suggesting meaningful upside, all else being equal”
Source: Briefing.com
