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Roblox $1.2 Million Put • Strike: 30 • Expiration: 3/17/23
By: Cheddar Flow | November 14, 2022
• $RBLX $1.2M OTM Put
Strike: 30
Expiration: 3/17/23
*Above the Ask*
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Roblox (RBLX) bar for growth much higher than JPMorgan thought
By: Investing.com | November 10, 2022
JPMorgan downgraded shares of Roblox Corp (NYSE:RBLX) to Neutral from Overweight, cutting its price target on the stock to $35 from $53 in a note to clients on Thursday.
Analysts told investors in a note that their previous view on Roblox was that an improving y/y bookings rate could drive continued outperformance in shares.
However, although "the company did see a better trend over the prior three months, the overall result was below what we had forecast, and more variable than anticipated (October CC adjusted growth of 15% y/y was down from 17-21% in September)," wrote JPMorgan.
The analysts added that yesterday's share price reaction to what they think was a slight miss to investor expectations also leads the firm to believe the bar for growth is "much higher" than they thought.
"We expect bookings to exit the year at a mid-teens growth rate, and extrapolating seasonality forward, forecast similar increases for 2023 (down from our prior high-teens view). While Roblox could see a lift from the rollout of new platform features and an aged-up user base, we also can't entirely discount the possibility that a worsening macro environment will eventually impact spending behavior," the analysts added.
Roblox shares are up 5% Thursday.
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Cathie Wood & Ark Invest's Buys 333,420 Shares of Roblox Corp (RBLX)
By: Ark Invest Daily | November 9, 2022
• Cathie Wood and Ark Invest's trade activity from today 11/9.
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RBLX Auto generated triangle breakdown, retest and rejection today following a big earnings miss for Roblox...
By: TrendSpider | November 9, 2022
• $RBLX Auto generated triangle breakdown, retest and rejection today following a big earnings miss for Roblox...
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Roblox shares tumble on wider-than-expected loss
By: Investing.com | November 9, 2022
Roblox Corp (NYSE:RBLX) shares tumbled early Wednesday following the company's third-quarter earnings release, which saw it miss analyst consensus estimates.
The online game platform reported a loss per share of $0.50, $0.20, worse than the analyst estimate of a loss of $0.30 per share. In addition, revenue for the quarter came in at $517.7 million, 2% year over year, and below the consensus estimate of $690.79M.
Roblox shares are down more than 9% at the time of writing.
Bookings came in at $701.7M, up 10% year over year, while average daily users grew to 58.8M, up 24% compared to last year. Meanwhile, the company said hours engaged increased by 20% to 13.4 billion, while average Bookings per DAU was $11.94, down 11% year over year.
"We are pleased with the third-quarter growth in users, engagement and bookings, which demonstrates the significant progress we are making on key platform initiatives such as aging up and international growth," said Michael Guthrie, Chief Financial Officer of Roblox. "At the same time, we are continuing a disciplined capital allocation strategy focused on maximizing long-term shareholder value."
Reacting to the report, Citi analysts said Roblox's Q3 bookings, Adjusted EBITDA, average bookings per DAU, and DAUs were generally in line with or better than consensus.
"3Q22 revenue finished below the Street, partially driven by a $110 million headwind related to a change in the company's estimated paying user life (which we view as a positive for the company)," wrote the analysts. "We are a bit surprised by the weakness in the shares this morning based on these 3Q results (and October trends)."
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Roblox CEO: "We are pleased with the third-quarter growth in users, engagement and bookings
By: The Transcript | November 9, 2022
• $RBLX misses on EPS and revenues.
CEO: "We are pleased with the third-quarter growth in users, engagement and bookings, which demonstrates the significant progress we are making on key platform initiatives such as aging up and international growth"
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Roblox Corp. (RBLX) misses revenue estimates, losses widen
By: Investing.com | November 9, 2022
(Reuters) -Roblox Corp on Wednesday missed Wall Street estimates for quarterly revenue by a wide margin after the video games developer changed its accounting practices, sending shares down 14% in premarket trading.
The company's revenue grew 2% to $517.7 million in the third quarter ended Sept. 30, lower than analysts' expectation of $686.3 million.
Roblox changed the period of estimated paying user life to 28 months from 25 months, resulting in a $111 million decrease in revenue during the reporting quarter. It also lowered costs by $25.5 million.
The company's results come as growth rates plummet in the broader gaming sector after people stepped outdoors and reserved spending for essential items in a bid to counter inflation.
Compounding challenges further, a deteriorating economy continues to ravage the advertising industry, including giants such as Snap Inc (NYSE:SNAP) and Facebook (NASDAQ:META) owner Meta Platforms.
Net loss for Roblox grew to $297.8 million, or 50 cents per share, in the quarter, from $74.0 million, or 13 cents per share.
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Cathie Wood & Ark Invest's Sells 384,499 Shares of Roblox Corp (RBLX)
By: Ark Invest Daily | November 4, 2022
• Cathie Wood and Ark Invest's trade activity from today 11/4.
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Roblox Corporation (RBLX) 50 area next big spot on this one
By: Options Mike | October 30, 2022
• $RBLX Perky, 50 area next big spot on this one.
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$RBLX Roblox has been HOT as of late. Inside bar yesterday makes this one to watch into next week!
By: TrendSpider | October 29, 2022
• $RBLX Roblox has been HOT as of late. Inside bar yesterday makes this one to watch into next week!
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Cathie Wood & Ark Invest's Sell 52,623 Shares of Roblox Corp (RBLX)
By: Ark Invest Daily | October 28, 2022
• Cathie Wood & Ark Invest's trade activity from today 10/28.
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Roblox (RBLX) Breakout follow through
By: Theta Warrior | October 26, 2022
• $RBLX Breakout follow through.
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Roblox (RBLX) Net Options Delta: +313.2K
By: Theta Warrior | October 25, 2022
• $RBLX Net Options Delta: +313.2K.
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Cathie Wood & Ark Invest's Sell 223,161 Shares of Roblox Corp (RBLX)
By: Ark Invest Daily | October 25, 2022
• Cathie Wood & Ark Invest's trade activity from Monday.
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Roblox Corporation (RBLX) Break over the 200D could release this one, 50 would be my next target
By: Options Mike | October 23, 2022
• $RBLX Break over the 200D could release this one, 50 would be my next target.
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Roblox Bull pennant setting up nicely after Monday's big gap up!
By: TrendSpider | October 22, 2022
• $RBLX Bull pennant setting up nicely after Monday's big gap up!
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Roblox $RBLX Retest time?
By: TrendSpider | October 20, 2022
• $RBLX Retest time?
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$RBLX High volume breakout today for Roblox with shares soaring over 20% in just one session!
By: TrendSpider | October 17, 2022
• $RBLX High volume breakout today for Roblox with shares soaring over 20% in just one session!
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Roblox's Impressive September Metrics Spark Red-Hot Options Activity
By: Schaeffer's Investment Research | October 17, 2022
• The company reported a 23% year-over-year jump in daily active users
• The stock is eyeing its best day in almost a year
The shares of Roblox Corp (NYSE:RBLX) are surging toward their biggest daily jump since November 2021, up 19.9% at $42.62 this afternoon after the company reported impressive September 2022 key metrics. Roblox reported a 23% jump in daily active users (DAUs) since last year, and a 16% year-over-year rise in engagement hours to 4.0 billion. The company also shared that its estimated bookings came in between $212 million and $219 million, marking an 11% to 15% 12-month jump.
Options traders are hitching their wagons to Roblox stock's wild trading activity, with 113,000 calls and 89,000 puts exchanged so far, which is five times the intraday average. The most popular position by far is the October 50 call, followed by the 45 call in the same monthly series, with positions being bought to open at both.
This implies these bulls are eyeing even more upside for RBLX, which has shed 58.5% in the past year. Roblox stock has found a floor at its $33 mark, however. Plus, today's pop put the security back above recent pressure at the 160-day moving average.
The penchant for calls today is unusual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), RBLX sports a 10-day put/call volume ratio of 1.12, which sits higher than all other readings from the past year. In other words, puts have rarely been more popular.
Roblox stock could be overdue for a round of analyst bull notes, should this positive price action continue. Of the 18 in coverage, just seven say "buy" or better, compared to 11 "hold" or worse ratings. Plus, the 12-month consensus price target of $41.89 is a slight discount to current levels.
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Roblox Corp. $RBLX with strong September data:
By: The Transcript | October 17, 2022
• $RBLX with strong September data:
+18% so far today.
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Roblox Stock Gains 15% After Reporting 23% Jump in DAUs for September
By: Investing.com | October 17, 2022
Shares of Roblox Corp (NYSE:RBLX) are up about 15% in pre-open Monday after the company reported a strong jump in September daily active users (DAUs).
Roblox reported 57.8 million daily active users for September, up 23% YoY, and 4 billion hours engaged, up 16% YoY.
Roblox also projected that bookings were between $212 million and $219 million, which would imply 11-15% growth. Estimated average bookings per DAU were $3.67 to $3.79, down 7-10% YoY.
Finally, the estimated revenue was between $171 million and $180 million.
“The strengthening of the US Dollar against the Euro, British Pound, and other foreign currencies during 2022 has had an adverse impact on bookings. We estimate that the impact of foreign currency fluctuations led to a reduction of approximately 6% in the year-over-year growth rate for September bookings. On a constant currency basis, we estimate bookings growth would have been 17% - 21% year-over-year and ABPDAU would have been down 2-5% year-over-year,” Roblox said in a statement.
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Jefferies Financial Group Cuts Roblox (RBLX) Price Target to $40.00
By: MarketBeat | October 14, 2022
• Roblox (NYSE:RBLX - Get Rating) had its price target dropped by equities research analysts at Jefferies Financial Group from $43.00 to $40.00 in a note issued to investors on Friday, The Fly reports. Jefferies Financial Group's price target would suggest a potential upside of 5.49% from the company's previous close...
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RBLX Up 9% on the day and still pushing higher!
By: TrendSpider | October 12, 2022
• $RBLX Up 9% on the day and still pushing higher! Keep this one on watch for a potential TL breakout.
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Roblox says policing virtual world is like 'shutting down speakeasies'
By: Investing.com | October 11, 2022
(Reuters) - As online gaming platform Roblox Corp confronts a lawsuit alleging it enabled a California girl's exploitation, its chief scientist said finding dangerous content in the company's virtual world is nothing like spotting it in video.
"It's such a challenge to moderate 3D," said Morgan McGuire in an interview at the Reuters Momentum conference in Austin on Tuesday. He had no comment on the recent lawsuit but said Roblox was built with safety and civility at the forefront.
San Mateo, Calif.-based Roblox is deploying bots to patrol user-generated games and press buttons to detect any dangerous content that players have disguised.
"This is more like shutting down speakeasies," he said, referring to U.S. prohibition-era bars hiding from law enforcement.
BBC reported this year that users had created explicit private spaces, known as "condos," where people's digital avatars could engage in virtual sex.
McGuire said the company is able to remove inappropriate content within minutes thanks to artificial intelligence software and moderators. What escapes scrutiny is not "horrifically bad" but more likely a terms violation, he said.
Still, a lawsuit filed last week alleges that adult men on Roblox connected with a girl, who was born in 2009, and nudged her to sign up for Discord, Snap Inc (NYSE:SNAP)'s Snapchat and Meta Platforms Inc's Instagram to talk to them. The suit alleges they pushed her to drink, abuse prescription drugs and send explicit images, later precipitating suicide attempts.
McGuire said Roblox bars users from posting phone numbers or off-platform links. But as momentum grows to connect disparate worlds into an alternate digital reality called the metaverse, Roblox is engaging with a consortium of companies about how they could work together in the face of different standards, he said.
"A real challenge when we start looking at the open metaverse concept is that we want to be able to preserve what we've built and not just allow anything to come into our platform," he said.
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Cathie Wood & Ark Invest's Buys 245,705 More Shares of Roblox Corp (RBLX)
By: Ark Invest Daily | October 8, 2022
• Cathie Wood & Ark Invest's trade activity from today 10/7.
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Roblox Recent Controversy Part of Video Game History
By: TheStreet | October 6, 2022
• Roblox removes controversial games, but controversy is nothing new in the gaming world.
Twelve years ago a man and a woman sat down to play a video game.
These people were neither teenagers nor gaming champions. They were Supreme Court Justice Elena Kagan and Justice Stephen Breyer.
The face-off took place in Breyer’s office, according to the Washington Post, and it wasn't for fun.
The pair, along with the other justices, were ruling on a California law banning the sale of violent video games to anyone under age 18 and requiring clear labeling beyond the existing Entertainment Software Rating Board (ESRB) system.
A lower court had found the law unconstitutional and then-California Gov. Arnold Schwarzenegger took his case to the highest court in the land.
Kagan and Breyer were most likely playing "Postal 2," a 2003 first-person shooter known for its gory and controversial gameplay, which was prominently mentioned in case filings. The game was banned in New Zealand, Australia, Malaysia, Germany, and Sweden.
The two justices were also on opposing sides when it came to the ruling, as the court voted 7-2 on June 27, 2011 to strike down the California law. Kagan sided with the majority, while Breyer dissented.
Breyer wrote that the First Amendment does not disable the government from helping parents make "a choice not to have their children buy extremely violent, interactive video games, which they more than reasonably fear pose only the risk of harm to those children."
Roblox Bans a Creator's Game
Certain video games have shocked and appalled one group or another ever since their creation, with complaints about extreme violence, sexism, or cruelty.
Roblox (RBLX) , a popular online platform and game creation system, got tripped up recently when it removed two games that allowed players to fight and kill each other as Russians or Ukrainians, the BBC reported.
One game, "War on Larkiv: Ukraine," was showcased to users in the Roblox discovery section and clocked up to 90,000 plays in less than two weeks.
The game was based in a fictional city that resembled the real city of Kharkiv, where Ukrainian officials have said at least 1,019 civilians, including 52 children, have been killed since the Russian invasion in February.
"War on Larkiv: Ukraine" encouraged players to upgrade their weapons in exchange for Roblox's in-game currency, Robux.
The other game, "Battle for Ukraine," had been on the Roblox website for months, according to the BBC, and it allowed players to watch the bombing of cities such as Mariupol, which was besieged by Russian forces and largely destroyed.
Roblox did not respond to a request for comment, but the company told the BBC, "we have strict Community Standards which govern the portrayal of real-world events. Both of the experiences in question have been removed for violating our standards following an assessment by our moderation team."
Roblox essentially works like a virtual Lego world, where users can build their own space, either on their own or with others, in pretty much any creative way they can imagine.
The company makes money by selling "Robux," an in-game currency which allows users to buy virtual building tools with real cash.
There are 9.5 million developers on the Roblox platform and it has over 40 million games. The company has 43.2 million daily active users, up from 14 million in 2016 and 67% of its users are children...
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Cathie Wood & Ark Invest's Buys 201,280 More Shares of Roblox Corp (RBLX)
By: Ark Invest Daily | October 3, 2022
• Cathie Wood & Ark Invest's trade activity from today 10/3.
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Analyst Lacks Confidence in Roblox's (RBLX) Metaverse Dreams
By: Schaeffer's Investment Research | October 3, 2022
• MoffettNathanson initiated coverage on RBLX with an "underperform" rating
• There's room for other analysts to join the bearish bandwagon
Shares of Roblox Corp (NYSE:RBLX) are 0.8% lower premarket, last seen trading at $35.57 after MoffettNathanson initiated coverage with an "underperform" rating and a $19 price target. According to the brokerage firm, it's too early to tell if the gaming platform will actually meet its lofty Metaverse aspirations, saying in its bear note that a "huge range of outcomes could be possible."
Coming into today, the brokerage bunch was split on RBLX, leaving room for additional downgrades to pour in. Specifically, while nine consider the equity a "hold" or worse, seven still rate it a "buy" or better. What's more, the 12-month consensus target price of $44.63 is a 25.6% premium to Friday's close, indicating more price-target cuts could be right around the corner.
For those looking to weigh in on Roblox stock, options look like a solid move at the moment. According to its Schaeffer's Volatility Scorecard (SVS) tally of 98 out of 100, RBLX has consistently realized bigger returns than options traders have priced in over the last 12 months.
On the charts, Roblox stock continues to struggle to rebound from its May 10 all-time low of $21.65, with overhead pressure from its 180-day moving average stymying rallies in August and September. Meanwhile, RBLX sports a more than 65% year-to-date deficit.
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Walmart Moves into the Metaverse with Launch of Roblox Experiences
By: Investing.com | September 26, 2022
Walmart (NYSE:WMT) announced the launch of metaverse experiences Walmart Land and Walmart's Universe of Play on the Roblox (NYSE:RBLX) gaming platform.
The move marks Walmart's first foray into the metaverse, with the spaces offering interactive content and entertainment for customers.
The retailer said its metaverse platform will feature "immersive experiences," including a virtual store of merchandise for your avatar, a Ferris wheel, and unlockable tokens and badges that can be earned in various games and competitions.
The pandemic saw a shift in consumer behavior, and Walmart is aiming to capitalize on the change by testing new ways to reach shoppers.
"We're showing up in a big way – creating community, content, entertainment and games through the launch of Walmart Land and Walmart's Universe of Play," said William White, chief marketing officer, Walmart U.S. "Roblox is one of the fastest growing and largest platforms in the metaverse, and we know our customers are spending loads of time there. So, we're focusing on creating new and innovative experiences that excite them, something we're already doing in the communities where they live, and now, the virtual worlds where they play."
Despite opening Monday's session lower, Walmart shares are up 0.7% at the time of writing. Roblox shares jumped in early trading, currently up almost 3% from Friday's close.
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Roblox Co. (RBLX) Given Average Rating of "Hold" by Analysts
By: MarketBeat | September 16, 2022
• Roblox Co. (NYSE:RBLX - Get Rating) has been given an average recommendation of "Hold" by the nineteen analysts that are presently covering the stock, Marketbeat.com reports. Three equities research analysts have rated the stock with a sell recommendation, seven have given a hold recommendation and three have given a buy recommendation to the company. The average 12-month target price among brokerages that have updated their coverage on the stock in the last year is $43.78...
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Roblox Corporation (NFLX) Tough time to be a metaverse play. See if the 100D holds
By: Options Mike | September 18, 2022
• $RBLX Tough time to be a metaverse play. See if the 100D holds.
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Cathie Wood & Ark Invest's Buys 107,199 More Shares of Roblox Corp (RBLX)
By: Ark Invest Daily | September 16, 2022
• Cathie Wood & Ark Invest's trade activity from today 9/16.
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Roblox - 160K share #darkpool print at $46.60
By: Money Flow Mel | September 15, 2022
• $RBLX 160K share #darkpool print at $46.60
**Investor Event going on now.
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Roblox Wants Advertisers to Boost Its Revenue. Wall Street is Skeptical
By: TheStreet | September 12, 2022
• Roblox is looking to let advertisers on its platform to boost revenue. Analysts are unconvinced that advertising in the metaverse will be a money maker.
With a user base of more than 52 million, Roblox (RBLX) is among the top entertainment and gaming platforms out there. Anyone with kids and an internet connection knows the power of ‘Robux’ in getting their tweens and teens to clean up their room or do their homework.
Yet like many other online platforms, the struggle to continue making money is real. Which is why Robox is planning on allowing advertisers to pay for the privilege of showcasing their brands in the virtual-reality worlds Roblox has become known for.
As part of its annual developer conference last Friday, Roblox said it plans to debut ads next year. Prior to the rollout, Roblox said it will be testing ads with unspecified developers and brands by the end of this year.
It is a move that other online platforms and services including the likes of Twitter (TWTR) , Snap (SNAP) , which owns Snapchat, ByteDance-owned TikTok and others have been increasingly engaging with amid post-pandemic plateaus in user growth and increasing expectations to make more money.
Roblox Revenue Growth Has Slowed
Robox essentially works like a virtual Lego world, where users can build virtual worlds, either on their own or with others, in pretty much any creative way they can imagine. Roblox makes money by selling Robux, which allows users to buy virtual building tools with real cash.
What has been absent in Roblox’s user-created worlds has been brands paying to build their own virtual worlds that entice other users to hop in. Imagine Starbucks (SBUX) , for example, having a virtual world of coffee shops and coffees, or American Eagle having virtual clothing stores.
Roblox describes its upcoming ad offering as immersive ads, though there’s not yet a standard format for how they will appear, though Roblox and others have speculated that ads in the metaverse could resemble digital goods like shoes and clothing that people could buy and wear – virtually of course.
Roblox has tried out some online ads with brands like Warner Bros. and shoe and clothing maker Vans. The ads were displayed in an experimental ad format that Roblox referred to as “portals.”
In the portal ad tests, when users interact with the brand, they can be automatically transported to the company’s virtual Roblox community, according to Roblox. At this stage, companies are just trying to understand how ads can function in Roblox and other metaverses.
Virtual Fight for Market Share -- and Survival
Roblox is jumping into online ads during a period of turbulence in the market. Meta’s (META) Facebook business and Snap have been particularly hurt by Apple’s privacy changes in iOS, which make targeting more difficult.
Meanwhile, Amazon (AMZN) and Apple (AAPL) are bolstering their ad businesses, as companies that rely on those platforms are spending more money to get in front of consumers.
All of that has impacted Roblox's bottom line -- and in turn its stock price.
Roblox debuted on the New York Stock Exchange in March 2021 and saw its market cap surge past $80 billion in November as investors poured into high-growth tech stocks. But this year’s economic slowdown has punished those businesses, including Roblox, which has shed 60% of its value this year.
In August, Roblox reported second-quarter financials that missed on both the top and bottom lines, and revenue growth slowed to 30% from more than 100% a year earlier. The company said in its quarterly filing that it generates “substantially all” of its revenue from the sale of Robux.
To be sure, analysts remain skeptical of Roblox’s prospects. Cowen analyst Doug Creutz on Monday initiated coverage on Roblox with an underperform rating and a one-year price target of $31. In premarket trading on Monday, shares of Roblox were down 1.6% at $44.80.
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Roblox Plans to Debut Ads on its Platform Next Year
By: Sam Boughedda | September 9, 2022
Roblox Corp (NYSE:RBLX) said Friday that it intends to have ads on its platform next year, its first notable effort to diversify revenue beyond virtual goods in games.
The company announced the news as part of its annual developer conference on Friday, with CNBC reporting the news.
Before the rollout, Roblox said it would test ads with developers and brands by the end of 2022.
CNBC said Roblox's chief product officer, Manuel Bronstein, explained that the company has already tested some online ads with companies such as Warner Bros. and Vans, with the ads displayed in an experimental format that Roblox described as "portals."
He did reiterate that Roblox is still committed to its core business.
Bronstein was quoted as saying that they have an "amazing transactional economy," and they will continue to invest in it," describing the move into online ads as a good strategic bet, but early in its development. Roblox said its ad offerings will be immersive ads.
As well as ads, the company is showcasing other new features, such as tools to help users discover virtual worlds and experiences and chatting features, alongside other tools.
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Can Roblox Reverse its Falling Bookings Amid Rising Engagements
By: Schaeffer's Investment Research | September 7, 2022
• Users Playing More But Spending Less
Online game creation and community ecosystem platform Roblox (NYSE: RBLX) stock has seen better days trading as high as $141.60 on the Metaverse hype before toppling to a low of $23.88 in June 2022. The concept of Roblox can be confusing to investors. Roblox is not a game, like Minecraft. It’s an online game development platform and social ecosystem that users can create games on. These games can be shared, played and sold to other users. The platform is most popular with children under 16, of which more than half of all kids in the U.S. are active users. The platform is free to use, helping it to garner over 160 million monthly active users and 52 million average daily active users (DAUs). The pandemic lockdowns was a blessing for the Company as bored kids all over the world discovered and played Roblox obsessively. The reopening has finally caught up to the Company as net bookings start to fall back during its normalization stage.
USERS PLAYING MORE BUT SPENDING LESS
Consumer discretionary spending is taking a sharp hit stemming from inflationary pressures. Video gaming is suffering as result of tightening consumer wallets. Net bookings are dropping for video game publishers across the board like Electronic Arts (NYSE: EA) and Take-Two Interactive (NASDAQ: TTWO). Graphics chip maker NVIDIA also cut their earnings guidance blaming the slowdown in gaming. Roblox is still seeing rising engagements, but its net bookings are falling. In other words, Roblox users are playing more but spending less.
ROBUX ECONOMY
Users can purchase in-game currency known as Robux through microtransactions to take actions (IE: changing username), upload games or buy digital items, accessories, characters, skills, tools and play games. Robux is the blood of the Roblox economy. Roblox cards can be purchased worldwide in retail stores to be used for microtransactions. They are called microtransactions because of the small dollar amounts of the transactions ranging from sub-penny to hundreds of dollars that players can spend. The in-game currency fluctuates like a real currency as more supply grows. Robux and gets cheaper in higher denominations. These microtransactions can quickly add up, as shocked parents receive hefty bills on their credit card statements. It’s especially controversial since these transactions are made by minors. The Company has also rolled out its premium members subscription plans ranging from $4.99 for 450 Robux to $9.99 for 1,000 Robux per month and $19.99 for 2,200 Robux per month. The plans also enable benefits like further discounts on Robux purchases, access to exclusive items, and access to the trade system. Users and groups can also earn Robux through premium payouts when other Robux premium subscribers are playing their games. The Company has also partnered with many corporate sponsors like Microsoft Rewards (NASDAQ: MSFT) to redeem points to Robux. Roblox also earns promotion, licensing and advertising revenues from brands that target the younger demographic.
TRANSFORMATION
While over 70% of Roblox users access it through a mobile device, the Company is expanding its access by adding gaming consoles like the Sony PlayStation 5 (NYSE: SNE) and Microsoft Xbox (NASDAQ: MSFT). It’s also working to reach an older demographic while maintaining its core audience. The Company is trying to move past its game or game platform stigma to a refined “human experience platform”.
STRONG ENGAGEMENT BUT WEAKENING BOOKINGS
On Aug. 9, 2022, Roblox released its fiscal second-quarter 2021 results for the quarter ending June 2022. The Company reported an earnings-per-share (EPS) loss of (-$0.30) missing analyst estimates for (-$0.26), by (-$0.04). Bookings fell (-3.8%) year-over-year (YoY) to $639.9 million beating $625.43 consensus analyst estimates. Average bookings per DAU was between $12.25, down (-21%) YoY. Revenues grew 30% YoY to $591.2 million. Net loss was $176 million missing analyst expectations for (-$157 million). DAUs rose 21% YoY to 52.2 million. Hours engaged rose 16% YoY to 11.3 billion. Roblox CEO David Baszucki commented, “We are driving record levels of users and engagement globally as we execute on our innovation roadmap and broaden the appeal of Roblox across geographies and age groups. We continue to make progress on key operational and product initiatives to enhance the long-term value of the Roblox platform.”
JULY METRICS STILL SHOW BOOKINGS FALLING
For July 2022, Roblox saw revenues by rise 25% to 27% YoY between $205 million to $208 million. Bookings rose 8% to 10% YoY between $243 million and $247 million. DAUs were up 26% to 58.5 million. Hours engaged rose 25% YoY to 4.7 billion. Average bookings per DAU was between $4.15 to $4.22, down (-12%) to (-14%) YoY. The downward trend in bookings are continuing to expand so far. The question is whether Roblox can reverse that negative trend by expanding its demographics and compelling users to spend more.
WHAT THE CHART SAYS
Using the rifle charts on the weekly and daily time frames provides a precision view of the playing field for RBLX shares. The weekly rifle chart completed a full stochastic oscillation up through the 80-band and is proceeding to fall back under the 80-band. The weekly uptrend is stalling as the weekly 5-period moving average (MA) is sloping down at $44.11 to a stalling 15-period MA near the $37.92 Fibonacci (fib) level. The weekly market structure low (MSL) buy trigger is trying to defend itself at $36.43. The daily rifle chart downtrend has a falling 5-period MA at $38.76 followed by the 15-period MA at $41.95 and 200-period MA at $56.02. The daily lower Bollinger Bands sit at $32.52 and upper BBs at $54.89. The daily stochastic is attempting to bounce off the 5-band. Attractive pullback levels sit at the $36.43 weekly MSL trigger, $34.45 fib, $30.89 fib, $29.56 fib, $26.08 fib, and the $24.01 fib level.
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Current Top 10 holdings of the @Roundhill Metaverse $METV ETF
By: Stock Market News | August 30, 2022
• Current Top 10 holdings of the @Roundhill Metaverse $METV ETF
1 Roblox $RBLX
2 Apple $AAPL
3 Nvidia $NVDA
4 Unity $U
5 Microsoft $MSFT
6 Facebook $META
7 Amazon $AMZN
8 Autodesk $ADSK
9 Snapchat $SNAP
10 Coinbase $COIN
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RBLX: Roblox up Nearly 65% Since Mid-June, Time to Go All In?
By: Stock News | August 24, 2022
Famous gaming company Roblox Corporation (RBLX) operates an online entertainment platform. The company provides Roblox Studio, a free toolset for developers and creators to build, publish, and operate 3D content; Roblox Client, an application that allows exploring the 3D digital world; Roblox Cloud, which provides cloud-based services and infrastructure; and Roblox Education for learning experiences.
The company serves customers in the United States, the United Kingdom, Canada, Europe, Asia-Pacific, and internationally.
The company reported disappointing second-quarter results and hinted at decelerating growth. Moreover, the significant decline in bookings (an adjusted revenue measure) paints a gloomy picture. Bookings fell 3.8% year-over-year to $639.90 million in the second quarter. For July, the decline in bookings widened, falling between 8% and 10% year-over-year.
Furthermore, last October, RBLX priced the offering of $1 billion aggregate principal amount of its 3.9% senior notes due 2030. The interest on these notes will be payable in cash semi-annually and will mature on May 1, 2030, unless earlier repurchased or redeemed. This note offering is expected to increase the company’s interest burden and reduce its cash balance.
As of June 30, 2022, RBLX’s total liabilities stood at $4.37 billion, compared to $3.97 billion as of December 31, 2021.
Despite deteriorating financials and bleak growth prospects, RBLX has gained 66.3% since June 16. The recent rally across the major market indexes on improved investor sentiment contributed to the surge in its stock price.
However, the stock has plunged 60.2% in price year-to-date to close the last trading session at $41.07. It is currently trading 71% below its 52-week high of $141.60, which it hit on November 22, 2021.
Here is what I think could influence RBLX’s performance in the upcoming months:
Top-line Growth Does Not Translate into Bottom-line Improvement
For the fiscal second quarter ended June 30, 2022, RBLX’s revenue grew 30.2% year-over-year to $591.21 million. However, the company’s operating costs and expenses increased 27.5% from the year-ago value to $761.47 million. Its loss from operations amounted to $170.27 million, worsening 19.1% year-over-year.
Furthermore, RBLX’s adjusted EBITDA declined 69.7% from the prior-year period to $54.64 million. The company’s net loss and loss per share attributable to common stockholders came in at $176.44 million and $0.30, widening 25.9% and 20% year-over-year, respectively. Its cash outflow for investing activities amounted to $89.98 million, up 287.3% year-over-year.
Weak Growth Prospects
Analysts expect revenues to increase 7% year-over-year to $682.24 million in the fiscal 2022 third quarter (ending September 2022). However, the consensus loss per share estimate for the ongoing quarter is expected to come at $0.32, worsening 149.7% from the same period in 2021.
Furthermore, the company’s revenue for the fiscal year 2022 (ending December 2022) is expected to decline marginally year-over-year to $2.71 billion. Also, analysts expect RBLX’s loss per share to worsen by 27.01% for the current year and 16.4% for the following year.
Low Profitability
In terms of trailing-12-month gross profit margin, RBLX’s 23.24% is 54% lower than the 50.52% industry average. And its trailing-12-month EBITDA margin of negative 20.62% is lower than the 19.31% industry average. Likewise, the stock’s trailing-12-month net income margin of negative 25.11% compares with the industry average of 5.66%.
Furthermore, RBLX’s trailing-12-month ROCE, ROTC, and ROTA are negative at 103.18%, 24.15%, and 11.26%, respectively.
Frothy Valuation
In terms of forward EV/Sales, RBLX’s 8.44x is 317.1% higher than the 2.02x industry average. Its 73.26x forward EV/EBITDA is 756.3% higher than the 8.56x industry average. Likewise, the stock’s 9.04x forward Price/Sales is 570.1% higher than the 1.35x industry average.
In addition, RBLX’s 61.16x forward Price/Cash Flow is 592.1% higher than the 8.84x industry average.
POWR Ratings Reflect Bleak Prospects
RBLX’s overall F rating translates to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.
RBLX has a grade of F for Stability. The stock’s relatively high beta of 2.32 justifies the Stability grade. In addition, it has an F grade for Value, in sync with its higher-than-industry valuation multiples.
RBLX is ranked last out of 22 stocks in the Entertainment – Toys & Video Games industry.
Beyond what I have stated above, we have also given RBLX grades for Sentiment, Growth, Quality, and Momentum. Get all the RBLX ratings here.
Bottom Line
RBLX delivered disappointing fiscal 2022 second-quarter results. And its near-term prospects look uncertain amid declining consumer demand, as indicated by a sharp drop in the company’s bookings. Furthermore, the stock is currently trading below its 200-day moving average of $58.39, indicating a downtrend.
Given its disappointing financials, bleak growth prospects, higher-than-industry valuation, low stability, and low profitability, we think it could be wise to avoid the stock now.
How Does Roblox Corporation (RBLX) Stack Up Against its Peers?
RBLX has an overall POWR Rating of F. One could also check out these other stocks within the Entertainment – Toys & Video Games industry with an A (Strong Buy) rating: Spin Master Corp. (SNMSF) and JAKKS Pacific, Inc. (JAKK).
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Roblox (RBLX) Price Target Raised to $55.00
By: MarketBeat | August 22, 2022
• Roblox (NYSE:RBLX - Get Rating) had its price target upped by research analysts at Citigroup to $55.00 in a note issued to investors on Monday, Stock Target Advisor reports. Citigroup's price target suggests a potential upside of 32.53% from the company's previous close...
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Roblox Corp. (RBLX) Lost the 21D pulling back
By: Options Mike | August 21, 2022
• $RBLX Lost the 21D pulling back.
50D next spot to watch.
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Roblox: Do You Like The Business Or Not?
By: Vince Martin | August 17, 2022
• Valuing RBLX stock is no easy task given significant uncertainties surrounding the business now
• After a rally, stock isn’t cheap — but the valuation is reasonable as long as growth continues
• From a broad standpoint RBLX is a straight bet on whether the company will deliver on its promise
What is Roblox (NYSE:RBLX) stock worth?
The true answer is that no one really knows.
After all, valuing any growth stock is difficult. Fundamental analysis requires trying to estimate growth years into the future. It’s an impossible task. All any investor can do is make as educated a guess as possible.
But even by those standards, RBLX stands out. There are two core uncertainties here.
Over the past few months, investors have veered wildly in predicting how those uncertainties will play out. In November, RBLX touched $140, giving the market capitalization of $70 billion. By May, the stock had fallen more than 80% from the highs. It’s since more than doubled.
Roblox Weekly Chart
Source: Investing.com
In the context of the story, the volatility makes some sense. But after that roller-coaster, the RBLX story looking forward is somewhat simple. If the business works, the stock will, too.
The Uncertainties Facing Roblox
The first is the impact of the novel coronavirus pandemic. School closures, no doubt, boosted the platform’s usage. Indeed, per Roblox’s Form S-1 filed ahead of its 2021 initial public offering, daily active users in 2020 averaged 2.6 hours on the platform. The number of DAUs nearly doubled.
But with normalcy returning, the tailwind has faded. DAUs rose 40% in 2021, per the Form 10-K. But the increase came largely from the platform’s overseas expansion. In the more mature U.S. and Canada market, DAU growth has stalled out:
Roblox Daily Active Users
Source: Roblox 10-Q
The same is true of bookings, which account for the actual cash spent on the platform in a quarter, rather than the revenue recognized during the period. Here are the bookings per daily active user:
Roblox Average Bookings Per Daily Active User
Source: Roblox 10-Q
The number of hours users are engaged, too, has headed back toward pre-pandemic levels.
The second question surrounds the durability of the platform. Roblox has exploded in popularity in recent years, but it’s not a new company: Roblox was founded in 2004. Bears toward RBLX stock — and more than 7% of the float still is sold short — have argued that the platform’s popularity is likely to reverse.
After all, Roblox’s core customer is under the age of 13. In fact, according to the 10-Q, 47% of daily active users in the first half of 2022 were under the age of 13. And children’s tastes are notoriously fickle.
Of course, that also means more than half of users are either 13 or older. Roblox has made a concerted effort to target those older potential customers, and with some success: in 2020, 54% of daily active users were under 13.
The Case Against RBLX
Both uncertainties underpin a seemingly logical bear case for the stock. After all, RBLX still is pricing in substantial growth.
At $48, Roblox has an enterprise value just shy of $26 billion. Bookings over the past four quarters have totaled $2.7 billion. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) over that period came in at just over $400 million, and free cash flow at roughly $300 million.
So RBLX is trading at almost 10x bookings, more than 60x EBITDA and 85x free cash flow. Yet, its growth has stalled out. In the first half of the year, though revenue growth has been strong, bookings have actually declined 4%. Both EBITDA and free cash flow have declined sharply, owing to higher fees to developers and increased employee expense.
Those year-to-date results support the argument that Roblox simply was a “pandemic winner.” And like so many pandemic winners — think Snap (NYSE:SNAP) or Peloton Interactive (NASDAQ:PTON) — the return to normalcy has meant the end of growth.
And that doesn’t even account for the fad risk. The focus on older age groups is working to some extent. Yet, that success hasn’t done anything to boost consolidated growth. And without growth, RBLX has significant downside ahead.
The Case For The Long View
All that said, there were reasons why investors bid RBLX up to $140. And it wasn’t just based on the company successfully monetizing users in the U.S. and Canada under the age of 13.
There are huge long-term potential tailwinds here. While Facebook owner Meta Platforms (NASDAQ:META) invests billions of dollars in the “metaverse,” Roblox already has a metaverse. As an analyst argued last year, the opportunities in areas like music and education are huge.
Meanwhile, even stalled-out performance against 2020 levels is hardly a disappointment. DAUs in 2019 (again, per the S-1) were 17.6 million; the figure has nearly tripled in less than three years. Bookings that year were just shy of $700 million; they’re now four times as high. Unsurprisingly, nearly every video game company has struggled this year, with Roblox actually having done better than most.
And, in the near term, there are potential growth drivers. The international opportunity is one in particular. Advertising is another, with Roblox launching its “immersive advertising” experience later this year. Those ad revenues will drop to the bottom line at high margins, driving earnings and free cash flow higher in a hurry.
At the least, it’s too early to write off Roblox stock, or to see the first-half performance as the beginning of the end of its growth. Investors can still see a company poised to transform online life worldwide — and a stock with much more upside ahead.
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Roblox Corp. PUT WRITING coming in at LOD in to the 09/23 $45 PUTS & the 09/30/22 $42 PUTS
By: Money Flow Mel | August 15, 2022
• $RBLX PUT WRITING coming in at LOD in to the 09/23 $45 PUTS & the 09/30/22 $42 PUTS (both opening at the BID - writing to collect premium)
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Deutsche Bank Aktiengesellschaft Raises Roblox (RBLX) Price Target to $52.00
By: MarketBeat | August 12, 2022
• Roblox (NYSE:RBLX - Get Rating) had its price objective upped by research analysts at Deutsche Bank Aktiengesellschaft from $45.00 to $52.00 in a note issued to investors on Friday, The Fly reports. Deutsche Bank Aktiengesellschaft's target price would suggest a potential upside of 4.19% from the company's previous close...
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Roblox Corporation (RBLX) RSI hot.. if it goes there is a gap @ the 200D..
By: Options Mike | August 14, 2022
• $RBLX RSI hot.. if it goes there is a gap @ the 200D.. would think that would be resistance for now.
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$RBLX Roblox pausing at the ATH Volume-Weighted Average Price (VWAP)
By: TrendSpider | August 13, 2022
• $RBLX Roblox pausing at the ATH VWAP.
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Cathie Wood & Ark Invest's Buys 191,503 More Shares of Roblox Corp (RBLX)
By: Ark Invest Daily | August 10, 2022
• Cathie Wood & Ark Invest's trade activity from today 8/10.
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