3 Roblox Analysts React To Q4 Earnings As Investors Pull Back

Gaming company Roblox Corp RBLX reported bookings growth of 20% in the fourth quarter and reported record revenue and daily active user metrics for its full fiscal year.

The company missed on earnings, reporting a loss of 25 cents per share vs. the 14-cent loss the Street was expecting. 

The Roblox Analysts: Needham analyst Bernie McTernan has a Buy rating on Roblox and $136 price target.

KeyBanc analyst Tyler Parker has a Sector Weight rating on Roblox and no price target.

Bank of America analyst Omar Dessouky has a Buy rating on Roblox and $84 price target.

Related Link: Roblox Q4 Earnings Highlights: Record Full Year Revenue, DAUs And More 

The Roblox Takeaways: January bookings for Roblox, which were provided in the fourth quarter earnings release, showed year-over-year growth of 2.5%. This was a key takeaway for McTernan, who said he's focusing on when bookings will reaccelerate.

Partnerships with big brands like Nike Inc NKE and the National Football League could be areas of growth while the company waits for bookings growth to return, the analyst said. 

“While news flow has accelerated on brands partnering on Roblox, we believe this opportunity is still at just the tip of the iceberg,” he said. 

The Needham analyst also highlighted an increase of users over the age of 13 as Roblox sees an “aging up” effect.

The monetization reported for the month of January was weaker than KeyBanc's Parker expected.

“The monetization in January seems to be largely influenced by tough comparisons and the international mix-shift,” the analyst said.

Parker said he looks toward the third quarter and fourth quarters of fiscal 2022 as important ones that will be “more indicative of 2023 growth.”

“Consensus numbers will likely need to come down meaningfully in the near term before the company’s expected re-acceleration in a few quarters.”

BofA's Dessouky pointed to strong growth versus tough comparables in Roblox's fourth quarter.

The analyst said what makes the numbers even better is that the company had a three-day platform outage in October.

“The lost Thursday, Friday and Saturday in October were the most valuable days of the week, constituting an estimated average of 58% of weekly bookings in 2021.”

Dessouky is also looking forward to seeing results in later quarters to get a better picture of what normalized growth looks like for Roblox.

RBLX Price Action: Roblox shares were down 26.14% to $54.14 Wednesday afternoon.