Roblox Corp (RBLX)

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Roblox Corp (RBLX) Stock Soars as Bookings Beat Estimates
By: Schaeffer's Investment Research | November 8, 2023

• Roblox stock has completely erased its August post-earnings bear gap

• Options traders are blasting RBLX in response

Roblox Corp (NYSE:RBLX) stock is up 19.4% to trade at $41.88 today, near the top of the New York Stock Exchange (NYSE) and on track for its best single-session pop since Feb. 15. The online gaming company beat booking estimates -- up 20% from a year ago -- while also reporting narrower-than-expected third-quarter losses per share and strong revenue.

Today's breakout has the stock completely recovering its August post-earnings losses and reclaiming several long-term moving averages, including its 200-day trendline. The stock has a history of outsized moves after earnings; including a 26.4% bull gap on Feb. 15, and a 21% drawdown a year ago. Since the start of the year, the equity is up 47%.

Price-target hikes could keep the wind at the shares' back. The consensus 12-month price target of $37.96 is a 9% discount from the stock's current perch, so adjustments could be imminent.

Naturally, RBLX is being flooded with activity in the options pits. So far, 110,000 calls and 49,000 puts have been exchanged, which is already 2.7 times the average intraday options volume. The weekly 11/10 42-strike call is the most active contract, where new positions are being opened.

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