Roblox Shares Jump: What 3 Analysts Are Highlighting In Q1 Earnings Report

Shares of Roblox Corp RBLX rose sharply in early trading on Thursday after the company reported upbeat quarterly revenues. The report came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Benchmark On Roblox

Analyst Mike Hickey upgraded the rating from Hold to Buy while establishing a price target of $45.

Roblox reported mixed first-quarter results, “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,” Hickey wrote in the upgrade note.

Net bookings grew by 23% in the quarter, representing “the strongest performance in six quarters, and continues to defy the presumed macroeconomic pressure on player spend,” the analyst said.

“We’re excited that RBLX has begun testing their new advertising system in F2Q23, where we believe they can build a material contribution over time,” he added.

Check out other analyst stock ratings.

Needham On Roblox

Analyst Bernie McTernan reiterated a Buy rating while reducing the price target from $53 to $48.

The adjusted EBITDA estimates for Roblox have been revised to reflect the higher-than-expected developer exchange fees reported in the first quarter and the company’s “new fixed cost growth commentary,” McTernan said.

“RBLX provided new commentary that they expect bookings growth to exceed infrastructure spending growth beginning in 3Q23E and compensation expenses growth beginning in 1Q'24E,” the analyst wrote.

“While we are raising our fixed cost estimates, we think management commentary provides a positive message to the market that the recent high growth period is coming to an end soon and highlights financial discipline,” he added.

Oppenheimer On Roblox

Analyst Martin Yang maintained a Perform rating on the stock.

“RBLX saw accelerating bookings growth in the past five quarters driven by higher engagement, and existing user monetization trends,” Yang wrote. “International markets and prepaid cards penetration are sources for bookings growth and gross margin expansion, respectively,” he added.

“Management anticipates bookings growth to outpace infrastructure and headcount investments in coming quarters,” the analyst further stated.

RBLX Price Action: Shares of Roblox were trading 3.27% higher at $40.15 Thursday morning. 

Photo via Shutterstock.