Bank of America reveals the five major moats of Roblox (RBLX.US), and the explosive game verification platform validates sustainable growth capabilities.

In its latest research report released on July 28, Bank of America Securities significantly raised the target price for Roblox (RBLX.US) from $103 to $133, maintaining a "buy" rating. The report pointed out that "Grow a Garden" (GAG), launched on March 26, has become the largest game debut in history, with a peak concurrent user (CCU) of 21.3 million, surpassing "Fortnite," providing the latest evidence for the company's "platform sustainable blockbuster" production. Strategic goal: Q2 bookings may exceed expectations, aiming for a 10% share of the global gaming industry Bank of America's forecast of a 30% year-on-year increase in second-quarter bookings made in early June was conservative, as GAG reached a peak CCU of 21 million on June 21, with average customer expectations for growth reaching as high as 40%. Bank of America predicts that the Wall Street consensus forecast of a 17% EBITDA profit margin for the second quarter is too conservative, and if revenue exceeds expectations, the company is expected to achieve a profit margin in the mid-20% range. Bank of America's analysis indicates that Roblox management's strategic goal of "becoming a 10% participant in the global video game industry" is driving the platform to expand from a teenage social scene to a broader gaming ecosystem. Although the specific timetable is not yet clear, the company will soon disclose the platform's long-term revenue model and the operating strategy of the new CFO. It is worth noting that this goal is not based on the natural extension of the existing user base, but is built on the successful foundation of innovative features such as GAG (Generative AI Games), which have demonstrated the platform's ability to continuously produce blockbuster content. Financial forecast: Q3 bookings may exceed expectations, profit margin elasticity released Bank of America's model shows that Roblox is expected to see a 23% year-on-year increase in third-quarter bookings, while the market's average expectation is 30%. If actual growth approaches the upper limit of buyers' forecasts, it will significantly exceed institutional expectations. Of particular note is the potential for margin improvement: supported by top-line data, the EBITDA profit margin could exceed the mid-20% level, depending on the pace of personnel expansion. This forecast is based on the continued release of cost levers in IT & S (Information Technology & Services), although short-term fluctuations may occur due to a surge in user durations, the long-term cost optimization trend is clear. Growth framework: Adjusting the baseline to a 20% compound growth rate The original "minimum + 20% annual compound booking growth" framework is facing restructuring. Bank of America observed that the management did not fully anticipate the explosive power of GAG when setting this goal, and the current market still generally values it at a 20% growth rate. Although the specific adjustment magnitude is not yet clear, virtually all surveyed investors recognize the possibility of the central growth moving upwards. It is worth noting that Bank of America has raised the target price to $133 (based on 54 times CY26E EV/EBITDA, up from 42 times) this adjustment reflects not only the expected improvement in profit margins but also implies optimism for the increase in free cash flow yield. Cost structure: Operational efficiency optimization supports valuation From a cost perspective, Roblox is demonstrating a clear path of cost control: the growth rate of operating expenses is expected to remain below that of revenue, and the leverage effect of IT & S costs is gradually becoming apparent. This structural profit release capability allows Bank of America to assign a higher EBITDA multiple in its valuation model. At the same time, the platform's low barrier strategy for developers (creating content without coding) continues to enrich the ecosystem, while the dual increase in global user base and engagement sets the foundation for long-term monetization. Long-term potential: Five pillars build a moat Bank of America emphasizes that Roblox's long-term value comes from five core strengths: firstly, innovative features like GAG verify the platform's content generation capabilities; secondly, the flourishing developer ecosystem brings exponential growth in content supply; thirdly, global expansion opens up the ceiling for user growth; fourthly, continuous technological innovation optimizes user experience; fifthly, as a pioneer in the metaverse, it holds a leading position in the market. These elements together constitute the foundation for challenging the traditional gaming industry landscape. Currently, Roblox is at a critical juncture of strategic transformation and valuation restructuring. Bank of America's analysis reveals that this company, which was once labeled as a "teen social platform," is gradually realizing its potential value as a global game industry disruptor through technological iterations and ecosystem expansion. With the release of Q3 performance guidance, the market may have an opportunity to reevaluate its long-term position.