Roblox (NYSE:RBLX) stock is on the rise Thursday as investors react to an upgrade from Wedbush analyst Nick McKay.
That upgrade has the analyst bumping RBLX stock up from a “neutral” rating to an “outperform” rating. To put that in perspective, the analysts’ consensus rating for RBLX stock is “hold” based on 24 opinions.
In addition to this, the Wedbush analyst also set the firm’s price target for RBLX stock at $37 per share. That represents a potential upside of 25.6% compared to yesterday’s close. However, it is still below the analysts’ consensus price prediction of $40.09 per share for RBLX.
What’s Behind the RBLX Stock Upgrade
Investors will note that this upgrade for RBLX shares comes after the online gaming platform released its latest earnings report yesterday. That saw the company’s shares fall as investors sold the stock amid lackluster results.
Here’s what McKay said about this in a note to clients obtained by CNBC:
“Roblox may have the most compelling growth trajectory among the video game names in our coverage universe after taking into account its user base size, its new products, and the potential to revisit its approach to profits. We expect patient investors to be rewarded by continued topline growth coming from the expansion of key user metrics, a slew of new product introductions, and a more aggressive approach to cost control in future periods.”
RBLX stock is up 4.8% as of Thursday morning as some 6.7 million shares change hands. The company’s daily average trading volume is about 9.7 million shares.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
