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
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.