Bank of America Sets $171 Roblox Target on 'Hit Factory' Growth

Engagement Outside Top Games Accelerates to 63%

Bank of America's bullish thesis on Roblox hinges on user engagement data that counters concerns of a platform slowdown. While third-party data from RoMonitor indicated that engagement with the "Top 2025 Hits" declined 39% quarter-over-quarter, the bank's analysis points to strengthening fundamentals in the broader ecosystem. Engagement growth excluding the top 10 games accelerated in the fourth quarter to +63% year-over-year, up from +56% in the third quarter.

This trend supports the view that Roblox is a content engine capable of consistently generating new hits rather than relying on a few blockbusters. Analysts noted that newer experiences like The Forge and Scary Shawarma Kiosk are climbing the charts, demonstrating the platform’s evolving and deepening content library. This diversification is central to the bank's argument that the platform's growth is more sustainable than bears anticipate.

BofA Raises Q4 Bookings Forecast to $2.09 Billion

Translating the positive engagement trends into financial projections, Bank of America increased its fourth-quarter bookings forecast for Roblox from $2.05 billion to $2.09 billion. This adjustment is built on the assumption of an 84% year-over-year expansion in user hours and a 25% quarter-over-quarter increase in average bookings per hour. The bank also maintained its first-quarter bookings growth projection of +43% year-over-year.

Despite the optimistic forecast, analysts noted that investor conversations suggest the market is already anticipating a minor beat on guidance. This implies that Roblox may need an outstanding earnings report to significantly move the stock price. The bank also projects that management's formal 2026 guidance will likely be conservative, given the inherent difficulty in predicting viral hits.

Valuation Nears IPO-Low, Creating 'Dip Buying' Opportunity

Bank of America frames Roblox as a compelling "dip buying" opportunity, highlighting that its valuation is near its lowest level since its initial public offering. At the time of the note, the company traded at approximately 26 times its enterprise value to its next-two-years EBITDA. The bank's $171 price target is derived from a significantly higher multiple of 47x EV-to-CY27 EBITDA, a premium compared to other rapidly growing software companies.

The core investment thesis is that if Roblox continues to prove its 'hit factory' model, the market will re-rate the stock based on its long-term durability. This potential for multiple expansion, combined with fundamental growth, underpins the significant upside projected by the analysts.