Roblox Corp (RBLX)

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Analysts bullish on Roblox (RBLX) following strong bookings, incoming inflection point
By: Investing.com | May 11, 2023

Roblox (RBLX) was upgraded to Buy with a $45 price target at Benchmark on Thursday, while Roth MKM also lifted the stock to Buy, raising the price target to $48 from $37, following the game platform's earnings release.

On Wednesday, before the open, Roblox reported a first-quarter loss per share of $0.44, $0.09 worse than the analyst estimate of a loss of $0.35 per share, while bookings for the quarter came in at $773.8 million versus the consensus estimate of $768.02 million.

Benchmark analyst Mike Hickey said, "RBLX delivered a mixed F1Q23 financial result, missing consensus view on profitability in the quarter, but delivered strong net bookings growth and a solid return to positive operating cash flow and free cash flow."

"We raised our rating to Buy, based on encouraging KPIs, reemerging growth, and operational discipline. RBLX appears to have worked through the pandemic influence and has been seemingly immune to macroeconomic pressure on consumer spend," the analyst added.

Meanwhile, Roth MLM's Eric Handler stated, "an inflection point is on the horizon."

"We are taking a more constructive view towards Roblox following comments from management that increases in headcount and compensation will soon be slowing," said Handler. "This action should create an inflection point in 2024 with adjusted EBITDA returning to growth, adjusted EBITDA margin expanding, and FCF returning to positive territory."

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