Roblox (RBLX) is well positioned to outperform the video game sector in bookings growth and margin expansion, driven by its technology infrastructure, untapped monetization potential, and unique user growth momentum, Oppenheimer said in a Thursday note.

The firm highlighted strong near-term trends, with average concurrent user growth in Q1 tracking at 30% year over year, ahead of 25% in Q4, suggesting bookings will likely surpass management's 22% guidance.

Oppenheimer also expressed increased confidence in Roblox's programmatic video ads strategy, citing the Google Ad Manager partnership as a catalyst. Oppenheimer expects ad revenue to reach a $100 million run rate by Q4.

The platform's recent large-scale event, The Hunt: Mega Edition, received mixed feedback but helped break all-time records for concurrent users. Oppenheimer expects continued experimentation with such events to support long-term engagement.

Oppenheimer upgraded Roblox to outperform, with a $70 price target.

Shares of Roblox were down 3.1% in recent trading.

Price: 55.54, Change: -1.77, Percent Change: -3.09