Roblox shares rose 2.3% to $117.50 on Friday after Wolfe Research analyst Shweta Khajuria upgraded the stock to Outperform from Peer Perform and placed a $150 price target.

Khajuria argued that Roblox still has significant room to grow thanks to its large addressable market, expanding content ecosystem, and continued improvements in monetization. The analyst noted the company’s ongoing efforts to improve platform safety but acknowledged the recent lawsuit from the State of Louisiana as a potential headwind.

Key Points from the Upgrade

• Wolfe Research raised Roblox to Outperform with a $150 price target.

• Shares rose 2.3% to $117.50 Friday.

• Roblox stock has nearly doubled in 2025 but is down 16% since July 31’s record high.

• Louisiana lawsuit highlights risks, though safety upgrades have been noted.

• AI-driven content growth, regional pricing, and early advertising efforts seen as major revenue drivers.

Despite August being a turbulent month for Roblox following the Louisiana lawsuit, Wolfe believes the company’s fundamentals remain strong. The platform’s AI tools have accelerated content creation, leading to more popular titles and stronger user engagement. In June, 28 of the top 200 games by spending had been launched within the past year, up from 21 a year earlier.

Roblox has also rolled out pricing strategies that adapt to local markets, offer tiered options, and help creators set optimal prices for virtual goods. According to Wolfe, these changes could lift bookings and earnings.

Advertising, though still in its early stages, is another growth lever. Wolfe estimates video ads alone could bring in an additional $300 million in 2026 and $650 million in 2027, representing about a 7% boost in bookings.

Khajuria concluded that Roblox has a long runway for growth as one of the fastest-growing companies in the sector, with meaningful margin expansion possible over the next few years.