Video game development company Roblox (NYSE:RBLX) slid 7.7% in premarket trading after bringing out background on its key metrics, and revealing a slide in both total users and in their spending on the platform. The losses have continued into this morning's trading session as well. While the key metrics are down, financial analysts are still deeply—and unanimously—interested in the stock, offering a bullish rating therein.
Roblox's Key Metrics Note Slips in Recent Days
The latest Roblox stock news featured the key metrics, and while there were positives to be found, some of the negatives were pronounced enough to spark selling. The company reported daily active users (DAUs) of 43 million for May. That was up 28% from May 2020, but down 1% from April 2021, when the company had 43.3 million active users. The 43 million DAUs spent a combined total of 3.2 billion hours in the game for May, which was up 9% against this time last year and also up 1% against the hours played in April 2021.
However, the average spend for those DAUs is in decline. Average bookings per DAU were noted at between $5.02 and $5.09, which is down about 3% from this time last year. Despite this, the company still brought in an estimated revenue of between $149 million and $151 million, which represents gains between 123% and 126% in year-to-year comparisons.
The numbers Roblox produced were sufficient to make it one of the two top-grossing games in the iOS App Store, as well as on Google Play. The second such game was role-playing title “Genshin Impact”, and both titles were cited for incorporating real-time online features that allowed users to connect socially.
Recent news has seen both gains and setbacks for the company. It recently made a move to expand its coverage by offering Roblox gift cards at 7-Eleven stores in Malaysia, thus making it easier for these players to get involved with the game. However, the company is also under fire from music publishers, specifically the National Music Publishers Association, which is suing Roblox over the use of copyrighted music in games produced on the platform. The lawsuit seeks $200 million in damages. While Roblox has over 1,000 human moderators to review audio files uploaded to the system, and searching for some artist names is prohibited, the Association notes there are loopholes in the system that make such uploads possible.
What Are Financial Analysts Saying About the Roblox Stock Forecast?
Despite the slip in total users and total user spending, the Roblox stock forecast is overwhelmingly positive, based on our latest research of financial analysts. The picture is not only unanimously in favor of buying in, but it's also growing. The stock currently has a consensus rating of “buy”, but has held that since March, and added on accordingly.
In March, there was just one “buy” rating on Roblox stock. By May, that had increased to seven “buy” ratings, and it remains at that point to this day.
The Roblox price target occupies a fairly narrow range as well, with a consensus target of $86 bookended by a low of $78 and a high of $103. Given that Roblox stock is currently trading at $82.48 per share, that offers some upside potential, and makes the Roblox stock price prediction look that much better.
Recent activity has been heavily in favor of Roblox stock as well. About two weeks ago, Truist Securities upgraded its price target on Roblox from $83 to $103, and Morgan Stanley offered a similar boost about three weeks before that, going from $80 to $87. Meanwhile, the latest companies to initiate coverage—Goldman Sachs, JPMorgan Chase & Co., Bank of America, and Stifel Nicolaus—all initiated coverage at a “buy”.
Companies in This Article: