Roblox's (RBLX) Q1 results highlighted momentum across all of its key metrics, including engagement, monetization, profitability, and the health of its creator economy, Morgan Stanley said in a note Friday.

For the quarter, the company's total bookings rose over 30% year over year, while daily active users increased 26% to 98 million, including 22% growth in the US and Canada, the investment bank said.

Morgan Stanley said that earnings before interest, taxes, depreciation and amortization margins reached 17%, the strongest for a first quarter since 2021, as operational efficiency improved.

The firm emphasized that the quarter highlighted Roblox's expanding flywheel, including higher-quality content, growing user engagement, and increasing monetization. More than 100 creators earned over $1 million on the platform in the past year, and games outside the top 10 are contributing a rising share of spend.

The firm sees further upside from margin expansion through direct payments and potential growth from underdeveloped revenue streams such as advertising and e-commerce.

Morgan Stanley raised its price target on Roblox to $76 from $70 and maintained its overweight rating.

The company's shares were up 6.1% in recent Friday trading.

Price: 73.21, Change: +4.21, Percent Change: +6.09