Roblox Corp
The results came amid an exciting earnings season. Here are some key analyst takeaways.
Goldman Sachs On Roblox
Analyst Eric Sheridan maintained a Neutral rating while slashing the price target from $48 to $38.
Roblox indicated it witnessed a decline in engagement in the first quarter, across regions, age cohorts and platforms, while identifying the likely cause as "a need for fresher content and more personalized experiences (as opposed to any competitive dynamic or market saturation)," Sheridan said in a note.
In the near term, investors were likely to focus on "the broader month-to-month user growth/engagement patterns" to determine whether the landscape exhibits consumer fatigue or competition, the analyst stated.
"Looking long term, we still see Roblox as a well-positioned company in the gaming/interactive entertainment space as well as an emerging thematic player around the metaverse and creator economy themes," he further wrote.
Piper Sandler On Roblox
Analyst Thomas Champion reiterated an Overweight rating while cutting the price target from $56 to $40.
Roblox reported disappointing first-quarter results, with a sequential slowdown in growth of both bookings and DAUs (daily active users), Champion said. Management lowered its full-year bookings guidance from $4.14-$4.28 billion, representing around 20% year-on-year growth at the mid-point, to $4.0-$4.1 billion, reflecting 15% growth, he added.
"We think the revision casts doubt on the ability of the company to expand Bookings at a 20% multi-year CAGR," the analyst wrote. He added, however that management still reiterated the EBITDA guide at $530-$600 million, "suggesting the profit and FCF outlook relatively unchanged."
Wedbush On Roblox
Analyst Nick McKay reaffirmed an Outperform Neutral rating while reducing the price target from $56 to $46.
"At a high level, Q1 was bookended by a strong start and a strong finish," McKay wrote in a note. "The middle of the quarter was impacted by issues that began to surface in Q4," he added.
While concerns around management credibility could exert pressure on the stock in the near term, if third-party data trackers and/or future quarterly results indicate that the company has turned the corner, "the stock could appreciate meaningfully," the analyst stated.
RBLX Price Action: Shares of Roblox were up by 3.45% to $31.42 at the time of publication on Friday.
