Unexpectedly strong performance cannot conceal the impact of AI, with several Wall Street investment banks lowering their price targets for Roblox (RBLX.US).

Despite Roblox (RBLX.US) announcing better-than-expected fourth quarter earnings for 2025 last week, several investment banks have downgraded their ratings and target prices for the company. Roblox expects bookings for the first quarter of 2026 to be between $16.9 billion and $17.4 billion, surpassing market expectations of $16.8 billion. Additionally, the company announced that it will no longer provide annual guidance starting from 2027 due to the "inherent volatility in the business," and will instead focus on providing quarterly guidance. Citigroup Inc. analyst Jason Bazinet lowered Roblox's target price from $152 to $119 following the release of the company's fourth quarter 2025 financial results, while maintaining a "buy" rating. This adjustment reflects the bank's update to its financial model for the company and takes into account the recent contraction in valuation multiples observed among Roblox's industry peers. Similarly, Piper Sandler reduced Roblox's target price from $125 to $100 and maintained a "neutral" rating. The firm noted that the stock outperformed the market after the earnings report showed a 63% year-over-year growth in bookings, exceeding their expectations and alleviating previous concerns. However, despite this growth, the firm pointed out that the growth rate has slowed compared to the 70% year-over-year growth in the previous quarter. UBS Group AG also lowered Roblox's target price from $103 to $74 with a "neutral" rating. The bank highlighted the company's strong performance in the fourth quarter of 2025 and the outlook for 2026 surpassing expectations. While the market is expected to react positively to these results, the bank believes concerns about competition and the emergence of new AI platforms could continue to put pressure on the stock price.