A steep sell-off in Roblox (RBLX) stock saw ARK Investment add to its position in the company, shrugging off fears about its user metrics and bookings growth as analysts split over the implications of its latest quarterly results.
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Cathie Wood’s ARK bought 369,000 shares of Roblox, worth around $24.7 million based on the stock’s closing price on Thursday of $67.12.
RBLX is a top holding in the ARK Innovation ETF (ARKK), with an allocation of 6.53%. It’s also a top 10 holding in the ARK Artificial Intelligence & Robotics ETF (ARKI), accounting for 4.23% of the fund, according to the latest readout from ARK Investment.
Analysts Split Over RBLX
The move by ARK came as analysts weighed in on the company’s Fiscal fourth quarter results. Deutsche Bank raised its price target to $78 from $70, maintaining a Buy rating on the stock. While Q4 results disappointed on some levels, bookings growth of 21% was still strong.
“This is certainly is not a structural issue, rather the company was simply lapping a fairly significant compare,” the Deutsche Bank analysts wrote.
As such it sees Thursday’s selloff as overdone and offers a “good buying opportunity.”
Similarly, Roth MKM raised its price target on RBLX to $72 from $70 and kept a Hold rating on the stock. Analysts there think the company is continuing to execute well and can deliver 20% annual bookings growth. BMO Capital went from $62 to $75 and stuck to its Buy rating on the stock.
MoffettNathanson was less optimistic, cutting the stock to Sell from Neutral and arguing that the company has some “ill-conceived notions” about its total addressable market. Overall, the consensus price target of analysts was trimmed by around $4.
Is RBLX a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy consensus rating on RBLX stock, based on 14 Buys, five Holds and two Sells. The average RBLX price target is $67.79, implying 1% upside.
