Roblox: Already Priced For Next Growth Mode

Update - Apr. 17, 2023

Great monthly numbers for March, but the stock got too expensive. Roblox is now down 12% on the news, as the stock was trading near 10x forward sales estimates. The stock is much more appealing in the mid-$30s. 

-Roblox (NYSE:RBLX) shares fell 12% premarket on Monday after the video-game company reported user metrics for March 2023.

-Average bookings per daily active user (ABPDAU) were between $3.73 and $3.85, implying a year-over-year change of -2% - +1%. The change in year-over-year March 2023 ABPDAU would have been between -1% and 3% on constant currency.

-Daily active users grew were 66.2M, up 26% Y/Y but was down from 67.3M in February. Hours engaged were 4.8B, up 26% Y/Y.

Update - Mar. 14, 2023

Great numbers in February with growth in the 20% range.... would be nice to see a weaker stock price. 

• Roblox (NYSE:RBLX) said its February revenue is estimated at between $214M and $217M, up 20% to 22% on a yearly basis.
• Daily active users rose 22% on a yearly basis to 67.3M.
• Hours engaged during the month were 4.6B, up 24% Y/Y.
• The online entertainment company is estimated to have made bookings of between $243M and $247M, up 18% to 19% from last year. 
• Estimated average bookings per daily active user is between $3.61 and $3.67, a decline of between 2% to 4% Y/Y.

• This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More » 

Update - Mar. 10

Roblox has $150M in deposits with $SIVB... should get it all back, but it's not a risk to the business either way.

-Roblox (NYSE:RBLX) dipped 0.6% after hours Friday as it joined companies commenting on their cash holdings at Silicon Valley Bank, which failed Friday and was closed down by California.
-Roblox said in an SEC filing that about 5% of its cash and securities balance (of $3B) is held at Silicon Valley Bank - or about $150M.
-"Thus, regardless of the ultimate outcome and the timing, this situation will have no impact on the day to day operation of the company," Roblox said in its filing.

Update - Feb. 23, 2023

Roblox close the gap up for the big Q4'22 earnings report. The stock entered the ideal buy point below $36 and already closed up $1.50 from the lows. 

Roblox trades at 6x '24 sales targets, but the stock isn't likely to get much cheaper. 

Update - Feb. 21, 2023

Roblox below $38 today sets up a prime buying opportunity when the gap is closed below $36.

 

Original article posted on Feb. 19

• Roblox Corporation soared following strong Q4 2022 earnings results.
• The gaming platform reported January '23 DAUs surged 19% YoY to 65 million, setting up strong growth.
• Roblox Corporation stock is already fully valued at a forward EV/S multiple of 7x.

In no surprise, Roblox Corporation (NYSE:RBLX) is back to a growth machine after the covid boost rolled off. The market has a far more positive view of the company now, though user growth has been strong all along and predictive of this growth phase. My investment thesis is more Neutral on RBLX stock above $40, with Roblox fully valued for an environment with 20% growth.

Read the full article on Seeking Alpha. 

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