Roblox (RBLX, $77) shares today rose 6.7% and hit a new post-offering high of $78 after Stifel initiated coverage at ‘Buy’ with a price target of $85 at Stifel. 

The firm calls Roblox a compelling play on the convergence of content and social, two viral loops that provide a mutually reinforcing network effect, driving higher engagement and monetization across the platform.

Roblox has a large and growing user ecosystem of more than 30 million, along with more than eight million developers, and is set to take advantage of the new entertainment popularity of digital content creation and usage, says Stifel.

Stifel is forecasting a three-year bookings CAGR of 28%. While the firm acknowledges tough comps in 2021, it sees a growth re-acceleration in the 2022-2023 period due to international expansion along with age diversification.