Roblox (RBLX) Shares Fall 23% on Analyst Downgrades and Reduced Guidance

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TLDR

• Roblox shares fell 23% in premarket trading after multiple analyst downgrades that followed a weaker-than-expected Q1 report
• Q1 bookings hit $1.73B, landing slightly below forecasts, while 132 million daily active users missed analyst estimates
• Full-year 2026 bookings guidance has been lowered to $7.33B–$7.60B, down from the prior forecast of over $8.4B
• The rollout of age verification has hurt user engagement, with only 51% of users completing the process compared to a 90% internal target
• The average analyst price target for the stock has dropped to $63.22, though the consensus rating still remains “Buy”

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(SeaPRwire) –   Roblox (RBLX) reported first-quarter bookings of $1.73 billion, which came in just below what analysts had projected. Daily active users reached 132 million — this miss set the tone for the market reaction that followed.

Roblox Corporation, RBLX

RBLX stock fell roughly 23% in premarket trading after firms including BTIG and Raymond James cut their ratings on the stock. The sell-off reflected both the soft Q1 results and a sharp downward reduction to the company’s full-year outlook.

Roblox now projects 2026 bookings between $7.33 billion and $7.60 billion. That is well below the company’s earlier forecast of more than $8.4 billion. Adjusted EBITDA guidance was also cut by nearly $500 million.

Second-quarter bookings guidance, ranging from $1.55 billion to $1.61 billion, also came in below current market expectations.

A large portion of the lower-than-expected user count can be traced to the company’s rollout of new age-verification requirements. Roblox introduced stricter verification rules that restricted access to communication features for users who had not yet completed the process.

Only about 51% of users have finished verification so far, while the company’s original target was 90%. This gap has had a measurable impact on how users interact with the platform.

Analysts noted that the changes disrupted what Roblox calls its “social gaming” experience, resulting in lower user retention and weaker onboarding for new users.

Costs Climb Amid Slowing Growth

Margin pressure is building from multiple sources. Roblox recently raised developer exchange rates for certain users, which increases payouts to creators and cuts into the company’s margins.

Higher marketing spending and ongoing investment in AI infrastructure are also pushing total costs up. The combination of slower growth and rising expenses is what drove the steep cut to EBITDA guidance.

Changes to the platform’s content discovery algorithms, which were meant to improve monetization, may have had the opposite effect on user experience according to analysts. As a result, content growth on the platform has slowed.

Analyst Targets Revised

Among 30 analysts covering RBLX, the average 12-month price target for the stock has fallen from $64.56 to $63.22. Targets range from a low of $46 to a high of $100.

Based on the May 19 closing price, this average target still implies roughly 42% upside from the stock’s current trading level.

Despite the recent wave of downgrades, the overall consensus rating across 37 analysts remains at “Buy”. The rating breakdown is 22 Buys, 15 Holds, and zero Sell ratings.

At the time of this update, RBLX was trading at $44.45, down $2.53 or 5.39% for the trading day.