Morgan Stanley analyst Matthew Cost has maintained their bullish stance on RBLX stock, giving a Buy rating on October 31.
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Matthew Cost’s rating is based on the potential growth opportunities for Roblox as it plans to re-enter the Chinese market. The company previously exited China in 2021, but the market remains a significant opportunity due to its size. A 5% penetration in China could lead to a 5% increase in EBITDA by 2027, and achieving a scale similar to mature markets could boost earnings by approximately 20%.
Despite the potential, Cost maintains a balanced view on the immediate impact of this move, acknowledging the challenges Roblox faced during its previous entry. The platform’s growth and sophistication since 2021 may improve its chances of success, but localizing games in China involves navigating different consumer preferences and regulatory constraints, particularly concerning minors’ gaming time. Therefore, while re-entering China presents a clear opportunity, the pace and magnitude of adoption remain uncertain.
In another report released on October 31, J.P. Morgan also maintained a Buy rating on the stock with a $145.00 price target.
Based on the recent corporate insider activity of 214 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of RBLX in relation to earlier this year.