10:32 AM EDT, 10/31/2025 (MT Newswires) -- Roblox ( RBLX ) is the "most compelling" growth opportunity in the video game sector, with its recent hit games driving record user engagement and monetization, Wedbush Securities said in a Friday note.

The brokerage said Roblox's ( RBLX ) "record-breaking" Q3 results reflected strong growth in bookings, engagement, and monetization, as a slate of new games drove a sharp increase in daily active users.

While some investors may view the gains as tied to one-off events, Wedbush said they reflect the company's structural advantages that support sustained organic engagement.

Roblox ( RBLX ) is investing heavily in expanding its data center infrastructure, which will pressure margins in the near term, particularly in Q4 and Q1 2026, but should boost profitability later as the company handles spikes in concurrent users more efficiently.

The brokerage attributed the recent share sell-off to management's comments about tough 2026 comparisons and increased investment needs but said these are essential steps for Roblox's ( RBLX ) long-term growth.

Wedbush, which has the company on its Best Ideas List, maintained an outperform rating and $165 price target on the stock.

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