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Investing.com — Deutsche Bank initiated coverage on Roblox Corp (NYSE:RBLX) Friday, assigning a buy rating and a $60 price target, implying an approximately 45% upside to the stock’s closing price on Thursday.
Roblox shares are down 3.8% Friday, with its year-to-date decline now just under 61%.
Analyst Benjamin Black told investors in a note that they see Roblox as an “early leader in the interactive digital creator marketplace, with growing moats and strong network effects.”
Black pointed to the number of daily active users (DAUs) Roblox now has, which is approximately 50 million, with the analyst saying it represents a 56% compound annual growth rate over the last three years.
The analyst believes that growth will slow in 2022 compared to the growth during the pandemic, but they see multiple paths to 96 million DAUs by 2025.
“Similar to other large marketplaces like Amazon, Uber, or YouTube, Roblox’s large supply base (developers), in our opinion, is one of its key competitive advantages,” added the analyst.
“Over the last 3 years, Roblox has more than doubled its developer community, with almost 10mn on the platform today.”
