DA Davidson initiates coverage of RBLX with Neutral rating

What happened: DA Davidson initiated coverage of Roblox (RBLX) on March 4, 2026, with a Neutral rating and a $65 price target, despite acknowledging impressive user growth. On May 22, they lowered their price objective to $45, maintaining the Neutral rating. Jim Cramer advised against owning RBLX due to economic uncertainty, despite its popularity among younger generations. Meanwhile, Roblox announced plans to overhaul ad policies and introduce revenue sharing starting 2027.

Market impact: The changes in analyst sentiment and Cramer's bearish stance may impact investor confidence in RBLX, potentially leading to valuation repricing. The gaming sector, particularly companies reliant on user growth and ad revenue, could face scrutiny. Roblox's ad policy overhaul might attract more brand dollars, benefiting both Roblox and its creator community.

What to watch next: Investors should monitor Roblox's Q2 2026 earnings (scheduled for late July) for updates on user growth and ad revenue. Additionally, track the rollout of Roblox's ad policy changes in 2027 to assess their impact on the company's financials and creator earnings.