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Roblox shares opened 15% up on Tuesday: here’s the catalyst

on Jan 17, 2023
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  • Roblox reports encouraging metrics for the month of December.
  • It ended last month with 4.8 million more DAUs than November.
  • Roblox shares have gained roughly 40% since the start of 2023.

Shares of Roblox Corp (NYSE: RBLX) opened nearly 15% up on Tuesday after the video game developer reported encouraging metrics for the month of December.

Roblox shares up on an increase in DAUs

In a press release this morning, Roblox said it ended last month with 61.5 million daily active users (DAUs) – an 18% increase year-on-year and up 8.5% versus November (read more).

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Hours engaged also went up 21% in December to 4.7 billion, helping estimated bookings push up 17% to 20% ($430 million to $439 million). “ABPDAU” – or the average booking per daily active user, however, remained roughly unchanged versus last year.

The California-based company also confirmed that it will stop reporting monthly metrics after March 2023. Roblox shares have gained about 40% since the start of the new year.

Roblox Corp to report Q4 results next month

On the downside, though, Roblox Corp said its revenue was still down up to 6.0% in December, related partly to the currency headwinds.

Strengthening of the U.S. dollar has had an adverse impact on revenue. On constant currency, we estimate our YoY December revenue decline would have been 5.0% [at the top end of the range].

Roblox is scheduled to report its Q4 results next month. Consensus is for it to lose 51 cents a share – more than double the 25 cents it lost in the same quarter last year.

Nonetheless, Deutsche Bank analyst Benjamin Black continues to recommend buying Roblox shares and sees upside in them to $45. That represents another 20% increase in its stock price from here.