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Macquarie initiated coverage of Roblox (NYSE:RBLX) at Outperform, noting it’s an attractive way into the “metaverse” as one of the “building blox” of the virtual environment.
“We believe Roblox has carved out a unique position within the gaming world with its rapidly growing social and gaming platform, where users can come to a 3D virtual world to socialize and interact with user-generated content that ranges across various forms of gaming and entertainment,” analyst Aaron Lee and team wrote in the coverage launch.
The nature of Roblox’s social component is a distinguishing factor, they noted — not only encouraging people to invite friends (evading the issues of costly user acquisition that mobile gaming rivals face), but also driving “substantial scale” in users and bookings.
“In our view, there is still a long runway for growth ahead, driven by user growth, better monetization, international penetration and a new advertising initiative,” Macquarie says.
The firm expects three-year compound annual growth in revenue of 17% and CAGR of 31% in EBITDA, among the highest forecasts in its coverage.
Macquarie set a target price of $46, implying 30% upside.
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