Shares of online gaming platform Roblox (RBLX 4.95%) ran up sharply on Thursday morning, putting the company on course for a sixth straight trading day of gains. At one point, Roblox was up by more than 11% before giving back all those gains -- and more -- in the afternoon. As of 1:55 p.m. ET, Roblox stock is actually down 2.1%.
If Wall Street analysts are right, however, the stock could soon head higher once again.
At least three Wall Street analysts have raised price targets on Roblox since close of trading Wednesday. The most optimistic of these estimates, from Morgan Stanley's Brian Nowak, is calling for about an 18% rise in Roblox's value to $150 a share -- and potentially as high as $230 -- over the course of the next 12 months.
Roblox reported last week on bookings, daily active users, and the number of hours those users spent online. All three metrics outperformed expectations, said Morgan Stanley in a note covered by StreetInsider.com. As a result, Roblox is raising its estimates for sales growth in 2021, in 2022, and even in 2023 by 4%, 7%, and 6%, respectively.
"Even through reopening headwinds in 2H:21," exulted the analyst, "RBLX has retained, grown, and monetized its audience at high rates." As Roblox continues to "penetrate specific new verticals (e.g., education and music)," Morgan Stanley sees the company only getting more valuable over time.
Not everyone is quite as enthusiastic about Roblox as Morgan Stanley, however. According to TheFly.com, two more analysts chimed in with higher price targets Thursday: Stifel's Drew Crum posited a $134 target price, but Atlantic Equities' Kunaal Malde only went as high as $125.
Of these two, Crum is clearly more optimistic about Roblox's potential as a growth stock, reminding investors that Roblox has a target of eventually reaching 1 billion monthly active users on its service. If Malde's estimate is right, on the other hand, Roblox stock at $121-and-change only has a few more percent points' worth of growth left in it.