Roblox shares jumped 20% on Monday: what happened?

on Oct 17, 2022
  • Roblox Corp says its key metrics were encouraging in September.
  • The video game company will report its Q3 results next month.
  • Roblox shares are now trading at Wall Street's average price target.

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Roblox Corp (NYSE: RBLX) is up 20% on Monday after the video game company said its key metrics were encouraging in September.

Roblox is up against tough comparisons

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Roblox had 57.8 million daily active users last month. That’s a 23% increase on a year-over-year basis. Hours engaged came in up 16% as well.

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Estimated bookings, as per the press release, were in the range of $212 million to $219 million, representing a 15% annualised growth at the top end of that scale.

During the COVID pandemic, Roblox saw bookings more than triple amidst higher demand for indoor activities. These numbers, therefore, are particularly impressive considering the tough comparisons.

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Roblox Corp is expected to report its Q3 results in mid-November. Consensus is for it to lose 31 cents a share this quarter versus 13 cents a share loss a year ago.

Wall Street rates Roblox shares at ‘hold’

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Sequentially, though, the picture was still unimpressive, probably as kids returned to school.

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Daily active users versus the prior month (August 2022) were down by 2.1 million. Hours engaged also took a 15% hit on a month-over-month basis. Estimated bookings were higher – $233 million to $237 million in August as well.

Even year-over-year, ABPDAU – estimated average bookings per daily active user and estimated revenue remained in the red; former down as much as 10% and latter about 2.0%.

“RBLX” is down more than 50% for the year as higher rates and economic slowdown continue to weigh on high-growth tech stocks. Still, Wall Street has a consensus “hold” rating on Roblox shares that have hit its average price target after today’s news.

Last month, retail behemoth Walmart picked Roblox to debut in the metaverse. (read more)

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