Roblox Shares Hit 8-Month Low— What’s Behind The Move?

• TD Cowen lowered the firm's price target on Roblox to $70 from $77 and kept a ‘Sell’ rating.
• Roblox in a blogpost on Tuesday announced that the company is scaling its advertising platform with new formats and tools designed to attract Gen Z. 
• Roblox had forecasted fourth-quarter bookings worth between $2 billion and $2.05 billion.

Shares of Roblox (RBLX) hit an 8-month low on Tuesday after an analyst at TD Cowen flagged concerns about the company's slowing growth. 

TD Cowen trimmed its fourth quarter (Q4) bookings estimate from $2.30 billion to $2.24 billion based on a slower December than they had been modeling. It also slashed their FY26 estimate from $8.48 billion to $8.09 billion, based on the exit rate into 2026, as per TheFly. 

Roblox in its recently announced third-quarter results reported $1.92 billion booking, a 70% rise year-over-year. It had said that it expects fourth-quarter bookings worth between $2 billion and $2.05 billion. 

TD Cowen lowered the firm's price target on Roblox to $70 from $77 and kept a ‘Sell’ rating on the shares. 

Roblox Aiming For Gen Z

Roblox in a blogpost on Tuesday announced that the company is scaling its advertising platform with new formats and tools designed to "solidify Roblox as an essential channel where brands can measure results and build authentic, lasting connections with Gen Z and Gen Alpha users”.

“We are introducing the Homepage Feature-a premium format that connects brands directly to the next generation on the Roblox homepage, which is the starting point for over 151 million daily active users," Roblox said. 

Roblox also said that it is expanding its programmatic partnerships, using Amazon DSP (AMZN) and Liftoff for Demand-Side Platforms and Index Exchange, Magnite (MGNI), and PubMatic (PUBM) for Supply-Side Platforms.

Outage 

Earlier in the day around 1:42 AM, Roblox experienced a surge in outages, according to the website Downdetector. More than 16,000 users reported that they faced issues with the platform. The actual cause was not clear but according to Downdetector 63% of the reported problems were related to server connection, and 32% was with Game Play. 

How Did Stocktwits Users React?

Retail sentiment around RBLX trended in ‘bullish’ territory amid ‘normal’ message volumes. 

Shares of Roblox were down more than 5% on Tuesday. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.
 

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