Roblox Earnings Are Coming: What to Watch

Roblox is slated to report its fourth-quarter and full-year 2021 results after the market close on Tuesday, Feb. 15.

Roblox has been posting strong revenue growth since it became publicly traded in March 2021 via a direct listing on the New York Stock Exchange. Moreover, the company has the potential of being a major participant in the burgeoning metaverse.

The Zacks Consensus Estimate for revenues is pegged at $763.11 million. The consensus mark for loss improved by 7.14% at 13 cents per share in the past 30 days.

Key Quarterly Numbers

In the third quarter, revenue soared 102% year over year to $509.3 million. This growth is particularly impressive when you consider the company faced tough year-over-year comparables because of the pandemic. In the third quarter of 2020 -- which was before vaccines started rolling out -- people were still staying home much more than usual. This dynamic drove a surge in video gaming, among other activities.

In the third quarter, Roblox posted a net loss of $74 million, or $0.13 per share, compared to a net loss of $48.6 million, or $0.26 per share, in the year-ago period. That said, the company is profitable from a cash standpoint. Operating cash flow slipped 2% year over year to $181.2 million and free cash flow rose 7% to $170.6 million.

Factors to Consider

Roblox’s fourth-quarter performance is expected to have benefited from growth in the company’s community of users and developers. This is expected to have driven sales of Robux, the currency used in Roblox, thereby aiding the top line.

The company’s fastest-growing demographic is between 17-to 24-year-olds. The Roblox developer community has been focused on tackling this expanding market with a robust content portfolio, updates and more innovative experiences featuring visuals and effects.

The company is expected to have benefited from the strong cash flow generated from Robux sales. Users spend Robux on experiences and items for their avatars, while developers and creators earn Robux by building experiences and items for users.

As measured on Jan 1, 2022, the median user on Roblox visited 40 unique experiences over the course of 2021.

In third-quarter 2021, the average daily active users (DAU) reached 47.3 million, up 31% year over year. Average bookings per DAU (ABPDAU) were $13.49, reflecting a 1.75% decline year over year. The game was offline for three days between Oct 28 and Oct 31.

Roblox also reported a 43% year-over-year growth in daily active users during the first 27 days of October 2021.

Roblox reported 54% growth in its user base, reaching 50 million, as of November 2021, from 32.6 million. The to-be-reported quarter’s performance is expected to have benefited from robust growth in daily active users.

Analyst Opinion on Roblox Stock

BTIG Research upped their price target on shares of Roblox from $98.00 to $133.00 and gave the company a "buy" rating in a report on Monday, November 15th.

Truist Financial lowered their price target on shares of Roblox from $103.00 to $92.00 and set a "buy" rating for the company in a report on Wednesday, October 27th.

Stifel Nicolaus boosted their price objective on shares of Roblox from $121.00 to $134.00 and gave the company a "buy" rating in a research report on Thursday, November 18th.

Atlantic Securities boosted their price objective on shares of Roblox from $110.00 to $125.00 and gave the company an "overweight" rating in a research report on Thursday, November 18th.

Finally, Morgan Stanley reduced their price objective on shares of Roblox from $150.00 to $115.00 and set an "overweight" rating on the stock in a research report on Wednesday, January 19th.

One analyst has rated the stock with a sell rating, three have given a hold rating and eleven have issued a buy rating to the company's stock.

Based on data from MarketBeat.com, Roblox currently has a consensus rating of "Buy" and a consensus price target of $103.46.