Roblox: Potential Beast Mode Unlocked
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Update - Oct. 8, 2024
Hindenburg announced a short on Roblox. The mobile gaming company rejects the short report mostly focused on questions on user metrics, not the bookings numbers.
The research firm notably points how large reported losses while ignoring the strong free cash flows due to how the company has to report bookings. The short report is hard to take serious.
Update - Aug. 1, 2024
Roblox is slipping after reporting strong Q2 numbers and guiding up on 2024 bookings. The dip could be related to the CFO leaving. The stock only trades at ~4x EV/S targets for 2025.
- Bookings for 2024 are expected in the $4.18-$4.23 billion range, up from $4.00-$4.10 billion.
- Free cash flow forecast was raised to $505-$535 million from $350-$420 million.
- Q2 average daily active users were 79.5 million, up 21% from last year
- Q2 bookings per DAU on average were $12.01, up 1%.
Originally posted on June 23
- Roblox faced a speed bump earlier this year but is now showing strong growth potential, including in advertising.
- Despite a dip in growth rate, Roblox reported increased Hours Engaged in April and is seeing signs of traffic rebounding, potentially reaching far above 20% growth now.
- The stock is cheap at only ~4x our EV/S targets for 2025.
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