Roblox stock price forecast ahead of earnings: here's why it may rebound

Roblox stock price has remained in a freefall this year, moving from a record high of over $150 in July last year to the current $65. This crash has led to a big multi-billion-dollar wipeout as the market capitalization has slumped from $96 billion to $45 billion. So, will the RBLX stock rise or fall after its earnings?

Roblox stock price has crashed amid growth concerns 

The RBLX stock price has crashed despite the company’s growth continuing. Data compiled by Seeking Alpha shows that its annual revenue rose to $823 million in 2019 to over $3.6 billion in 2024.

The most recent results showed that the company's growth continued its momentum in the third quarter. Its daily active users jumped to 151 million, up from 88 million in the same period a year earlier. This growth made it one of the biggest entertainment companies globally.

The user growth coincided with its revenue performance. Its revenue rose to over $1.35 billion, up by 48% from a year earlier. More data showed that its operating cash flow grew to over $546 million, while its free cash flow jumped to $448 million.

Roblox aims to continue growing its business in the coming years. Its goal is to capture over 10% of the global gaming industry. Most importantly, the management raised its guidance for 2025 and now expects that its average annual booking growth will be 37%. 

It has achieved that goal two years ahead of schedule, thanks to Grow a Garden, Steal a Brainrot, and 99 Nights in the Forest.

The next key catalyst for the Roblox stock price is the upcoming earnings, which will come out on Thursday. Data compiled by Yahoo Finance shows that analysts expect its revenue will come in at $2.08 billion, up by 52.80% YoY. 

If this is accurate, the annual revenue will be $6.65 billion, up by 52.10% YoY. The challenge, however, is that analysts expect that its revenue growth will slow to 21% to $8.06 billion.

Additionally, the other challenge is that the company continues to lose a lot of money. Its last annual loss was over $935 million.

Analysts expect that its annual EPS in 2025 was $1.55, up from $1.44. Its loss per share will then continue, reaching $1.65 this year.

Analysts are largely optimistic about Roblox, with the average stock target of $127, much higher than the current $65.

RBLX stock price technical analysis 

Roblox stock chart | Source: TradingView

The daily timeframe chart shows that the Roblox share price has crashed in the past few months, moving from a high of $150 to the current $65.

It has continued falling this year and moved much lower than the 50-day and 200-day Exponential Moving Averages (EMA). 

The stock has moved to the Weak, Stop &Reverse level of the Murrey Math Lines tool. Also, the Average Directional Index (ADX) has dropped to 30 from the year-to-date high of 47. Falling ADX is a sign that the downtrend is losing steam.

Therefore, the most likely scenario is where the stock rebounds after the earnings tomorrow as buyers target the upper side of the descending channel. This price coincides with the Strong, Pivot, Reverse of the Murrey Math Lines tool.