Jefferies Downgrades Roblox to Underperform Over Valuation Concerns
Jefferies downgraded Roblox Corporation to Underperform, arguing a recent 30% share price rally exceeds the company's likely bookings trajectory.
Jefferies Group downgraded Roblox Corporation from Hold to Underperform on September 28, 2026, while maintaining a price target of $38. The financial services firm stated that a recent 30% rally in share price has priced in a bookings trajectory that the company is unlikely to deliver.
Jefferies bases this assessment on the fact that Roblox recognizes revenue over the estimated life of a user rather than at the moment of purchase. Consequently, the firm views current bookings as a more accurate indicator of immediate player spending than reported income statements. Roblox shares closed Friday at $46.44, which is approximately 18% above the Jefferies target price.
Despite the downgrade, the platform continues to maintain a massive audience of young users. The company is currently attempting to expand its reach by courting older players and distributing standalone games beyond its primary application.
