Roblox to Report Q1 Earnings: What's in the Cards?

Roblox RBLX is set to report first-quarter 2024 results on May 9.
The Zacks Consensus Estimate for revenues is pegged at $931.05 million, indicating growth of 20.32% from the year-ago quarter's levels.
The Zacks Consensus Estimate for loss has widened by 1 cent to 53 cents per share over the past 30 days. The company reported a loss of 44 cents per share in the year-ago quarter.
Notably, the company's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 4.37%.
Let's see how things have shaped up prior to the announcement.

Factors to Note

Roblox's first-quarter performance is expected to have benefited from user and developer growth and strength in daily user engagement levels on the platform.
The company witnessed strong usage growth in the fourth quarter of 2023. Improvements in booking and daily active users (DAUs) were also recorded as customers spent more time on its games. This trend is likely to have continued and positively impacted the overall first-quarter 2024 performance as well.
Roblox's increasing penetration in user base between nine and 12 years holds promise. RBLX's developer community's focus on providing good content, featuring better visuals and effects, and continued market penetration is expected to drive first-quarter results.
Users are growing across regions around the globe, including the United States and Canada. While DAUs of all ages are growing, users aged 13 years and older continue to contribute the most and rose 28% in the fourth quarter of 2023 from the year-ago quarter. The Zacks Consensus Estimate for DAUs in the to-be-reported quarter is pegged at 78.3 million.
In the last reported quarter, average DAUs were 71.5 million, which increased 22% year over year. Hours engaged were 15.5 billion, up 21% year over year. Bookings were $1.12 billion, up 25% year over year. The Zacks Consensus Estimate for hours engaged and bookings is currently pegged at 17 billion and $930 million, respectively.
RBLX is likely to have increased investments and some amount of fixed costs in the first quarter. This seasonality is expected to have kept the company's margins under pressure.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.
Roblox has an Earnings ESP of -2.24% and carries a Zacks Rank #2 at present.

Stocks to Consider

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
NVIDIA NVDA has an Earnings ESP of +2.50% and carries a Zacks Rank #2 at present.
NVIDIA is scheduled to release first-quarter fiscal 2025 results on May 22. The Zacks Consensus Estimate for NVDA's earnings is pegged at $5.49 per share, indicating growth of 403.67% from the year-ago quarter's reported figure.
Burlington Stores BURL has an Earnings ESP of +2.72% and carries a Zacks Rank #2 at present.
BURL is set to report first-quarter 2024 results on May 23. The Zacks Consensus Estimate for the company's earnings is pegged at $1.06 per share, indicating a rise of 26.19% from the year-ago quarter's reported figure.
Docebo DCBO has an Earnings ESP of +8.00% and a Zacks Rank #3 at present.
Docebo is set to report first-quarter 2024 results on May 9. The Zacks Consensus Estimate for DCBO's earnings is pegged at 17 cents per share, indicating growth of 88.89% from the year-ago quarter's reported figure.
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