Roblox (NYSE:RBLX) turned in its first earnings report since it went public back in March, and the open-source online video game company turned in a truly eye-catching report. While the company missed on earnings, it delivered a beat on revenue and several of its key metrics were on a very rapid rise. The combination of hits and misses was enough to send Roblox up as high as 5% in after-hours trading, gains it held onto well into today's trading, thanks mainly to the rising metrics and a surge in interest in video gaming.
Roblox's Earnings Report May Be Better Than It Looks
Roblox's earnings report delivered what should have been a disaster. The company turned in a loss of $0.46 per share against an expected $0.21, but turned in revenue of $387 million, up 140% against this time last year. Reports suggest this was a miss despite the gains, however, as analysts were expecting quarterly sales of $568 million.
The latest revenue figures represented a rise of 161% against last year's figures, with the average booking per daily active user up 46% against last year's figures as well. The current average revenue per active user is $15.48, and with daily active users (DAUs) up 37% against this time last year—reaching 43.3 million currently—the rising rates of return from an average user coupled with a rise in average user counts means rapidly-rising revenue rates. With sporting events and afterschool activities curtailed or canceled outright, that fueled an interest in video gaming above and beyond what was normally seen. However, the company posted a net loss for the quarter of $134.2 million, reports noted.
Roblox's CFO, Michael Guthrie, offered comment on the results, noting that the company's ongoing investment in its key areas will help fuel long-term growth. The company looks to focus on hiring talented engineering and product development personnel, which should help drive earnings for the company's developers.
Roblox represents an unusual prospect in video games, in that it's not so much a video game developer as it is a marketplace for other developers. Developers create content for the Roblox online platform, which can then be purchased by end-users using Roblox's own internal currency, Robux. At last report, there are around seven million user-creators in play, putting out content for the platform.
What Are Financial Analysts Saying About Roblox Stock?
While Roblox's latest earnings report generated some unusual results, with growing revenue and growing losses, financial analysts—based on our latest research—are heavily bullish toward Roblox stock.
When Roblox went public back in March, by April, the company had six “buy” ratings to its credit. Currently, that now stands at seven “buy” ratings.
The average price target, meanwhile, exists in a surprisingly narrow range. The average price target is $80.71 with a high of $87 and a low of $78. Given that Roblox stock trades at $70.14 as of this writing, there is some clear upside potential connected with this stock.
Earlier today, Morgan Stanley raised its price target to that new $87 high, ahead of the previous high of $85 held by JPMorgan Chase & Co., who initiated coverage on Roblox yesterday.
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