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Wedbush isn’t deterred after disappointing second-quarter results from Roblox . The firm upgraded the gaming stock to outperform from neutral Wednesday, accompanied by a $37 per share price target. Wedbush’s forecast implies more than 25.6% upside. Roblox missed on both the top and bottom line on Wednesday, sending shares plummeting more than 20% . Daily active users on a year-over-year basis, however, increased 25%. Analyst Nick McKay attributed the earnings miss to “the data trackers, seasonality and stubbornness” and reiterated his conviction on the company’s longer-term outlook. “On balance, however, Roblox may have the most compelling growth trajectory among the video game names in our coverage universe after taking into account its user base size, its new products, and the potential to revisit its approach to profits,” McKay said. The analyst added that the large-scale stock selloff on Wednesday could present investors with a buying opportunity, with an upside-skewed risk-to-reward profile. “We expect patient investors to be rewarded by continued topline growth coming from the expansion of key user metrics, a slew of new product introductions, and a more aggressive approach to cost control in future periods,” he said Roblox has ticked up 3.5% this year. RBLX YTD mountain Roblox stock has added nearly 4% from the start of 2023. — CNBC’s Michael Bloom contributed to this report.
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