Roblox's Virtual World Has Real Profits Ahead, Analyst Says
Roblox Corp. (NYSE:RBLX) is pressing its advantage as one of the fastest-growing platforms in gaming, betting that surging user engagement, viral hits like “Grow a Garden” and stepped-up investment in safety and AI can help it capture 10% of the $180 billion video game market and turn its virtual playground into accelerating real-world cash flows.
B. Riley Securities analyst Drew Crum initiated coverage on Roblox with a Buy and a price forecast of $125. Crum said the stock can rise more than 30% from the December 4 close.
The analyst argued Roblox has built one of the leading next-generation entertainment platforms, powered by reinforcing social and content network effects that resemble Alphabet Inc.’s (NASDAQ:GOOGL) YouTube ecosystem.
Also Read: Roblox’s Strong Results Impress Wall Street, But Cautious 2026 Outlook Creates Uncertainty
Viral Content And Network Effects
He cited the viral success of Grow a Garden and multiple other breakout hits as evidence that the platform can regularly deliver mass-appeal experiences.
Roblox’s large developer community, easy creator onboarding, and generous developer payouts have accelerated content velocity and quality. Seven titles topped 10 million+ DAUs in the third quarter of 2025, which Crum called a virtuous cycle that should produce more “hit” content over time.
The analyst expected Roblox to sustain 20%+ bookings CAGR. He noted Roblox hosted tens of millions of daily users and generated over $4 billion in bookings recently, leaving substantial upside.
Most of the user base remains unmonetized, and an “aging up” user mix plus new ad and direct-payment initiatives can lift ARPU, as per the analyst.
Investment Cycle, Margins And Valuation
Crum accepted near-term margin pressure as management accelerates investments in trust & safety, AI, and infrastructure, but he viewed those investments as strategic and necessary to support the next growth phase.
The analyst modelled healthy Covenant adjusted EBITDA growth and margin expansion into the mid-20% range by the end of the forecast period.
On valuation, Crum said Roblox justified a premium multiple given its unique market position and growth profile.
He recommended initiating or adding positions after the recent ~30% pullback, calling Roblox a core holding for investors seeking high-growth exposure in interactive entertainment.
Crum projected fourth-quarter revenue of $2.04 billion and adjusted EBITDA of $546.4 million.
RBLX Price Action: Roblox shares were down 1.69% at $97.33 at the time of publication on Wednesday, according to Benzinga Pro data.
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