Multiple Wall Street firms including Goldman Sachs and Morgan Stanley have cut their price targets on Roblox Corporation by nearly 50 percent after the company lowered its 2026 bookings growth outlook.
The cuts follow Roblox's guidance revision, which management tied to the rollout of a global age-check system that slowed user growth. Wedbush analysts, who trimmed their target to $65, said they were nonetheless maintaining an “Outperform” rating, reflecting a common theme among the revisions.
Goldman Sachs cut its price target to $65 from a prior $125, while Morgan Stanley reduced its target to $62 from $140. Oppenheimer also trimmed its target to $82 from $130. Despite the sharp cuts, the new targets from a consensus of 22 analysts still imply significant upside from current trading levels, with a median target of $72.50.
The wave of revisions reflects investor uncertainty as Roblox trades near-term growth for platform safety, a move that has pressured the stock down 28.8 percent over the past three months. The key question for investors is whether new engagement tools and a recently announced $3 billion share buyback program can restore momentum.
Safety Features Impact Growth
The central issue is the friction caused by Roblox’s new safety measures. Following the January rollout of global age checks for chat access, users who did not verify their age lost the ability to communicate, reducing social interaction on the platform. Management stated that 51% of global daily active users (DAUs) had completed the checks, with a goal to surpass 90%. The company now expects a sequential decline in DAUs from the first to the second quarter before a return to growth in the third quarter.
While analysts have reset near-term expectations, many remain positive on the long-term story. Most of the firms that cut their price targets reiterated “Buy” or “Overweight” ratings. Cathie Wood’s ARK Invest also showed conviction, purchasing 307,000 shares on the pullback. This contrasts with heavy selling from company insiders over the past six months, with zero open-market purchases reported.
In response to the engagement dip, Roblox is rolling out new AI-powered creation tools, dubbed “Roblox Reality,” to better compete with game engines from Unity Software and Epic Games. The goal is to deepen the developer ecosystem and support higher-quality experiences that can drive organic growth.
The guidance reset puts the focus on management's ability to re-accelerate user growth in the second half of the year. Investors will be watching for a return to sequential DAU growth in the third quarter as proof that the safety-led strategy can become a long-term advantage.
This article is for informational purposes only and does not constitute investment advice.
