By Wallace Witkowski
Bookings for September top consensus as online world-building platform popular with tweens finds a way to get a little more cash from every user during seasonally low month
Shares of Roblox Corp. headed for their best performance in nearly a year on Monday after the youth-oriented social media platform released figures for September that suggested a turnaround after a year of work.
Roblox (RBLX) on Monday morning reported September bookings and daily active user (DAU) numbers that suggested a better-than-expected trajectory for the quarter, and shares took off. By early afternoon, the stock was trading up 22%, near its intraday high of $43.43, putting it on course for its best one-day performance since November 9. 2021, when the price soared 42% after the company turned growth in October. despite an outage over Halloween weekend. The other most recent big day for Roblox shares was May 12, when shares ended up 19.2%, according to FactSet data.
Roblox estimated bookings of $212-219 million for September, even as a stronger dollar against the euro and the pound adds about 600 basis points to the year-on-year bookings growth rate. on the other.
Cowen analyst Doug Creutz said in a Monday note that September’s performance exceeded its previous estimate of $210 million, putting Roblox on track to top consensus for the quarter despite negative seasonal trends. target audience of tweens returning to school during the month.
Midway through July, August and September, bookings for the quarter would be $695.5 million, just slightly below our estimate of $698 million and slightly ahead of consensus of $690 million. dollars,” Creutz wrote in a note that had some optimism about Roblox despite the analyst’s underperforming rating and $31 price target on the stock.
Read more: Is metaverse pioneer Roblox ready for fierce competition? This analyst doesn’t think so
Jefferies analyst Andrew Uerkwitz, who has a holding rating and a price target of $40, called September bookings “impressive” as the 11% gain was “primarily due to a better than expected monetization per committed hour”.
Roblox reported 57.8 million daily active users, or DAUs, for a 23% year-over-year gain, and 4 billion hours of engagement, up 16% year-on-year on the other. But the biggest payoff came from the amount of money Roblox generated during those hours of engagement.
While engagement was in line with Creutz’s estimate, the analyst said “spend per hour was 5% higher than our expectations” and that daily engagement hours and spend per engagement hour “demonstrated better sequential growth compared to prior year periods”.
Roblox is expected to report third-quarter results on Nov. 7, with analysts polled by FactSet expecting a loss of 30 cents per share on revenue of $692.5 million and bookings of $690.9 million. Earnings reports this year largely disappointed bookings, which the company defines as “revenue plus the change in deferred revenue during the period and other non-cash adjustments.”
Read: Wall Street sees a ‘Pandora’s Problem Box’ for Roblox
“Reservations” is important to Roblox because its core business is selling virtual currency on its site which can be considered deferred income, but the metric has largely become synonymous with disappointment at Roblox in 2022.
The stock posted its worst one-day performance since its IPO after reporting weaker-than-expected bookings growth in February, losing more than a quarter of its value in a single trading session, once it has become clear that children once stuck indoors are finding other ways to spend their time as restrictions related to the COVID-19 pandemic begin to be lifted. In May, Roblox shares came under fire after the company reported an unexpected drop in bookings
Over the past two quarters, the company has seen back-to-back surprise declines in bookings. And stocks fell in mid-September when the August metrics were released, and appeared to do little to inspire investor optimism.
Of the 25 analysts who cover Roblox, 12 have buy ratings, eight have hold ratings, and five have sell ratings, along with an average target price of $42. With Monday’s gains, Roblox shares are down nearly 60% for the year, compared to a 23% drop in the S&P 500 index and a 32% drop in the tech-heavy Nasdaq composite index. .
In Depth: Five things to know about Roblox, the tween-centric gaming platform
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