Shares of mobile gaming platform Roblox (RBLX -1.11%) were up 6% as of 2 p.m. ET on Friday, continuing a hot streak that started about two months ago. Since market close on May 10, its stock is up 71%. That said, it's still down 70% from its all-time high.
Today's move could be a delayed reaction to positive news yesterday. After all, the market was down sharply on Thursday, but Roblox stock was basically flat. It seems investors liked what they heard about the company, but the market's down day kept it from going up yesterday.
This positive news came from Needham analyst Bernie McTernan and Bank of America analyst Omar Dessouky. Both McTernan and Dessouky had previously had a price target of $40 per share for Roblox stock. But coincidentally, both analysts raised their price targets yesterday to $45 per share, according to The Fly.
Analysts are hardly raising any price targets these days. That's why the market was likely encouraged to see not one but two analyst upgrades for Roblox stock on the same day.
For his part, McTernan is increasingly bullish about Roblox's near-term prospects after having conversations with developers that sound good for the platform's monetization. This is interesting considering Roblox's most recent user metrics weren't encouraging in this regard. The company's May bookings per daily active user were down between 23% and 24% compared with last May.
Dessouky also is encouraged by what he's seeing. However, he did offer investors a reminder of a challenge that Roblox needs to overcome. According to new data from third-party research group Sensor Tower, mobile spending for games in June was flat from last year and still down from June 2020. Therefore, while the market was understandably upbeat about the price target increases, investors should still remember that Roblox is facing an industry headwind right now that could negatively impact upcoming financial results.