Roblox Analyst Says Google Ad Pact ‘Smart Strategic Move’ From Gaming Platform: Retail Sentiment Flips To Bullish

Shares of Roblox Corp. (RBLX) rallied 4.63% on Tuesday after the immersive gaming and creation platform announced a partnership with Alphabet, Inc.’s (GOOGL) (GOOG) Google.

The San Mateo, California-based company said Rewarded Video ads will be available for brands and agencies to buy programmatically via Google’s advertising solutions and direct buying in the coming weeks. 

Roblox said the partnership with Google is a foundational element in its advertising vision, enabling it to quickly scale its Rewarded Video ads and other immersive ads offerings to meet demand from brands and agencies.

Rewarded Video ads enable users to opt in and watch up to 30-second full-screen video ads within immersive Roblox games and experiences. In return, users receive in-game benefits from the creators of these games and experiences, also known as the ad publishers. 

The company noted that early tests showed an average completion rate of over 80%, with select experiences seeing over 90% completion. 

“Adding Google Ad Manager to the Roblox tech stack enables Roblox to quickly scale its immersive advertising formats to meet buyers where they buy their media,” the company said. 

Commenting on the partnership, Piper Sandler analyst Thomas Champion said it is a “smart strategic move” that makes use of an ad format that drives high pricing in mobile gaming, TheFly reported.

The firm views the deal as an “important incremental positive” in its thesis, confirming its expectations that there existed  an ads monetization opportunity at Roblox. 

Piper Sandler reiterated an ‘Overweight’ rating and $73 price target for Roblox shares.

On Stocktwits, retail sentiment toward Roblox stock flipped to ‘bullish’ (59/100) by the close of trading on Tuesday, from ‘bearish’ a day ago. The message volume turned ‘extremely high.’

RBLX sentiment and message volume, as of 2:01 a.m., April 2 | source: Stocktwits

Calling Roblox the “next app” and the Google deal “great news," a bullish watcher said they were long on the stock.

Another predicted an extended rally in the stock.

Roblox stock came under significant selling pressure in early February when it reported lackluster bookings numbers and other key user metrics for the fourth quarter. 

Incremental weakness materialized amid the broader market sell-off, but the stock is up about 5.5% year-to-date. 

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