Is Roblox stock a ‘buy’ despite a decline in daily active users?

By:
on Apr 17, 2023
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  • Roblox says it noted a sequential decline in DAUs last month.
  • Oppenheimer analyst Ari Wald shares his view on RBLX.
  • Roblox stock is currently up nearly 45% versus the start of 2023.

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Shares of Roblox Corp (NYSE: RBLX) are down 12% on Monday after the video games company reported a sequential decline in its daily active users.

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Notable figures in the monthly update

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The San Mateo-headquartered firm ended March with 66.2 million DAUs versus 67.3 million in February. On a year-over-year basis, though, the metric still came in up 26%, as per the press release.

Roblox Corp estimated $3.73 to $3.85 of average bookings per daily active user for March. The lower end of that range suggests a 2.0% decline versus last year. Estimated revenue, the company added, climbed as much as 21% to $233 million last month.

Other notable figures in the monthly update include hours engaged that went up 26% and estimated bookings that noted between 23% and 27% increase.

Year-to-date, Roblox stock is still up nearly 45%.

Should you buy Roblox stock?

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Reacting to the monthly data, Oppenheimer’s Ari Wald said there’s reason to buy Roblox stock on today’s weakness.

The Head of Technical Analysis sees upside in this name to $44 a share. On CNBC’s “Power Lunch”, he said:

I see a stock that’s been making higher lows since May of last year. It’s stabilised, stopped going down. It moved above its 200-day MA this year. So, with it down 11% today, I think it finds buying interest and snaps back.

Earlier this month, Jefferies also raised its price target on RBLX to $52. Roblox Corp is expected to announce its Q1 financial results in May. Consensus is for it to lose 42 cents a share versus 27 cents per share a year ago.

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