To The Moon

Roblox is getting no love today, as RBLX stock is down more than 20% after reportingQ4 earnings. The metaverse and gaming company reported revenue of $568 million, which missed analysts’ expectations of $604 million by about 6%. In addition, earnings per share came in at -25 cents, which missed analysts’ expectations of -11 cents. Furthermore, Roblox remains unprofitable, posting a net loss of $143.3 million compared to a loss of $58.7 million a year ago.

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On the bright side, while revenue came in below expectations, the figure still grew by 83% year-over-year (YOY). However, the cost to fund this growth grew as well, as operating lossesmore than doubledto $139.7 million from $68.6 million YOY. On top of that, Roblox has used these expenses to fund a very wide consumer base, boasting a Q4 daily active users (DAU) figure of 49.5 million people. However, the company’s Q4 DAU slightly missed Wall Street’s expectation of 50.1 million people.

Roblox’s CFO, Michael Guthrie, commented on the report, saying:

“The foundation we put in place that allows us to invest in our business while continuing to generate strong cash flow is one of the most unique aspects of our business. Our 2021 results demonstrate that the investments we were able to make in our technology and developer community are generating strong returns, and we will continue leaning into the business as we focus on the large, long-term growth opportunity ahead of us.”

In light of the unsatisfactory earnings, investors are wondering where RBLX stock will head next. Let’s take a look at how Wall Street feels about Roblox price predictions.

RBLX Stock: Analysts Weigh In on Roblox Price Predictions

• Needham has aprice target of $136. Analyst Bernie McTernan believes that Roblox is well positioned to capitalize on a $130 billion market, ex-China. At the moment, McTernan believes that Roblox has a 1% market share. Additionally, the analyst states that Roblox’s developer-based and social aspects will attract more users to the platform. Finally, McTernan adds that he expects U.S. and Canadian bookings to grow at 25% per year until 2025.
• Bank of America has aprice target of $84. Analyst Omar Dessouky believes that themetaverseis still in its early stages, with Roblox acting as a tech and product leader in that sector. The analyst estimates that the company will be able to achieve a 26% bookings compounded annual growth rate (CAGR) through 2025, “excluding potential adjacencies of $2Bn.”
• Jefferies has aprice target of $70. Analyst Andrew Uerkwitz believes that Wall Street growth estimates for the company are too high. Furthermore, the analyst notes, “We are happy to sit sidelined” in regards to RBLX stock. Uerkwitz would like to see “growing new payer numbers as well as an acceleration in recurring payers growth.”