NEW YORK, NY – August 23, 2025 – Investor enthusiasm for Roblox Corporation (NYSE: RBLX) has surged, propelling its stock upward after a significant endorsement from a top Wall Street firm. Wolfe Research analyst Shweta Khajuria upgraded the online entertainment platform to “Outperform” from “Peer Perform,” issuing an ambitious price target of $150 per share.[1][2] The upgrade, which sparked a 2.9% rise in RBLX shares during a high-volume trading session, shines a spotlight on the company’s powerful growth drivers, including new monetization strategies and a rapidly expanding global user base.[3]
This bullish forecast is not just a fleeting market sentiment; it’s rooted in a deep analysis of Roblox’s evolving business model and its potential to unlock substantial new revenue streams. As the company continues to scale, its ability to convert immense user engagement into financial performance is becoming a central part of its investment narrative, capturing the attention of both individual and institutional investors.
The Catalyst: Unpacking Wolfe Research’s Bullish Thesis
The upgrade from Wolfe Research is built on a multi-faceted belief in Roblox’s future. Khajuria’s analysis points to several key catalysts expected to accelerate growth, leading the firm to raise its 2026 bookings and EBITDA estimates by 7% and 13% respectively, placing them significantly above Wall Street consensus.[1][3]
At the core of this optimism is the “platform flywheel” effect.[1] This concept describes a virtuous cycle where the platform’s continuous improvements in game discovery, user experience, and AI-powered content creation tools attract more players. This growing user base, in turn, attracts more developers to the platform. These developers, empowered by better tools, create more diverse and engaging experiences, which further fuels user growth and engagement. This self-reinforcing loop is seen as a powerful engine for long-term, durable growth.
The analyst note also highlighted Roblox’s push into new gaming categories and the use of AI to accelerate the creation of user-generated content, which is expected to support both user and revenue growth.[1][2]
New Frontiers in Monetization: Advertising and Pricing Strategy
Perhaps the most compelling part of Wolfe Research’s analysis is the focus on untapped monetization avenues. The firm projects that two key initiatives a nascent advertising business and strategic pricing optimizations could add hundreds of millions of dollars to the company’s top line.
1. The Dawn of Advertising: With a massive, highly engaged audience of over 111 million daily active users, Roblox represents a new frontier for advertisers.[4] The company is in the early stages of rolling out its advertising platform, which will include immersive video ads that are integrated directly into the 3D experiences on the platform.[2][5] Wolfe Research projects that this new advertising revenue stream could contribute an additional $300 million in gross revenue by 2026 and grow to $650 million by 2027 from video ads alone.[1][2] This strategy allows brands to create interactive and engaging worlds, moving beyond traditional disruptive ads.[5]
2. Strategic Pricing Optimization: Roblox is also refining how it prices its virtual currency, Robux, and in-game items. By implementing regional and tiered pricing, the company can adapt to local market economies and provide more flexible options for players.[1][2] This move is expected to improve conversion rates and increase overall spending on the platform. Wolfe Research estimates that regional pricing strategies alone could add $318 million to bookings in 2026.[1][6]
| Projected Revenue Stream (by 2026) | Estimated Contribution |
| Advertising (Gross Revenue) | ~$300 Million |
| Regional Pricing (Bookings) | ~$318 Million |
These initiatives represent a strategic pivot toward diversifying revenue beyond in-game purchases, which currently account for the majority of the company’s income.[7]
The Engine Room: Analyzing Roblox’s Explosive User Growth
The foundation of Roblox’s success and its future potential lies in its massive and rapidly growing user base. The platform’s metrics from the second quarter of 2025 paint a picture of staggering scale and engagement.
Roblox reported 111.8 million Daily Active Users (DAUs) in Q2 2025, a stunning 41% increase year-over-year.[4] This growth is not just coming from its traditional younger demographic. Engagement among users over the age of 13 is growing even faster, with a 54% year-over-year increase in DAUs in this cohort.[6] As of 2025, the platform boasts approximately 380 million monthly active users.[8][9][10]
This expansion is a global phenomenon. While North America and Europe remain strong markets, the most dramatic growth is occurring in the Asia-Pacific (APAC) region.[8][11] Bookings growth in Q2 2025 was particularly strong in key international markets:
- Japan: Over 50% YoY growth
- India: Over 90% YoY growth
- Korea: Over 120% YoY growth
- Indonesia: Over 150% YoY growth
This geographic diversification de-risks the business and opens up enormous new markets, supporting Wolfe Research’s long-term view that the platform could eventually reach one billion daily active users.[1]
Growth in Daily Active Users (in Millions)
(A bar graph showing a steady upward trend in DAUs over the last several quarters would be placed here)
A Look at the Financials: Revenue, Bookings, and the Path to Profitability
Roblox’s financial performance reflects its hyper-growth phase. The company’s Q2 2025 earnings report showcased impressive top-line momentum.
Revenue: Reached $1.08 billion, up 21% year-over-year.[4][12]
Bookings: A key metric representing the value of virtual currency purchased by users, surged to $1.44 billion, up 51% year-over-year.[4][6][12]
For the full fiscal year 2025, the company projects bookings to be between $5.87 billion and $5.97 billion.[3][12]
| Financial Highlight (Q2 2025) | Amount | Year-Over-Year Growth |
| Revenue | $1.08 Billion | +21% |
| Bookings | $1.44 Billion | +51% |
| Daily Active Users (DAUs) | 111.8 Million | +41% |
While the company reported a consolidated net loss of $279.8 million for the quarter, this is characteristic of a company heavily investing in technology, infrastructure, and its developer community to fuel long-term growth.[4][12] The Developer Exchange program, which is a cornerstone of its creator economy, paid out $316 million to creators in Q2 2025 alone, a 52% increase from the prior year.[7]
Despite the overwhelming optimism, investors must consider the challenges facing Roblox. The company’s massive user base, a significant portion of which is under 18, brings intense scrutiny regarding user safety.[13] Recently, the Louisiana Attorney General filed a lawsuit against the company, alleging it failed to adequately protect minors on the platform.[2]
In her report, Wolfe’s analyst acknowledged these risks, but noted that Roblox has made significant strides in improving its trust and safety measures. She argued that the company’s strong fundamentals and growth trajectory ultimately justified the more positive outlook.[14]
Another point of discussion among investors has been insider stock sales.[7] While large sales by executives have been reported, these are often part of pre-arranged trading plans for liquidity and financial planning purposes. However, the optics of these sales while the company is not yet profitable remain a consideration for the market.[7]
Wall Street Consensus: What Do Other Analysts Think?
Wolfe Research’s bullish stance is largely in line with the broader sentiment on Wall Street. The consensus rating for Roblox stock among analysts is “Strong Buy” or “Moderate Buy.”[15][16] Average price targets from various analysts generally fall in the $120 to $132 range, with some forecasts reaching as high as $170 to $175.[15][16][17] This indicates a widespread belief in the company’s growth story, even if Wolfe’s $150 target is on the higher end of expectations.
Conclusion: A New Chapter of Growth for the Metaverse Pioneer
The upgrade from Wolfe Research serves as a powerful validation of Roblox’s strategic direction. By successfully nurturing a self-sustaining ecosystem of players and creators, the company has built a formidable platform with deep user engagement. Now, by layering on sophisticated new monetization strategies like advertising and dynamic pricing, Roblox is poised to enter a new chapter of financial growth.
While navigating the inherent challenges of moderating a global platform and charting a course to profitability, the fundamental picture remains compelling. With explosive user growth, particularly in international markets and older demographics, and significant untapped revenue potential, Roblox is solidifying its position not just as a gaming company, but as a leader in the future of interactive social experiences. For investors, the recent upgrade suggests that despite its impressive run, the game is far from over.
Frequently Asked Questions (FAQs)
Why did Roblox stock (RBLX) go up recently?
Roblox stock rose significantly after Wolfe Research, a respected Wall Street firm, upgraded its rating to “Outperform” (“Buy”) from “Peer Perform” (“Hold”) on August 22, 2025.[3][14]
What is the new price target for Roblox stock?
Analyst Shweta Khajuria of Wolfe Research set a new price target of $150 per share.[14] Other analysts have an average target in the 120−120−132 range.[15][17]
What are the main reasons for the analyst’s upgrade?
The upgrade was based on several factors, including the “platform flywheel effect” (where users and developers attract each other), significant new revenue opportunities from advertising, and strategic regional pricing that is expected to boost monetization.[1][2]
How many users does Roblox have in 2025?
As of the second quarter of 2025, Roblox reported 111.8 million daily active users (DAUs) and approximately 380 million monthly active users.[4][8]
What are the risks associated with investing in Roblox?
Key risks include challenges related to user safety and content moderation, which has led to regulatory scrutiny and lawsuits.[2][14] Additionally, the company is still in a high-growth phase and is not yet profitable, and it faces competition in the broad entertainment and gaming industries.
