Roblox: Has The Metaverse Hype Train Crashed?

109
6
Favorite

Roblox: Has The Metaverse Hype Train Crashed?

Seekingalpha2022-06-02

SummaryBy now, many "hype trains" have proverbially crashed in the past few months, given the drastic market correction.As a Metaverse stock, RBLX has also lost 78.8% of its value from its 1Y highs....

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

109

Report

Comment（6）

Cyberkien
·2022-06-02
Bet for future
Reply
Like
Report
CIG
·2022-06-02
You downgraded to Hold, but I will still Buy!
Reply
Like
Report
Fiona888
·2022-06-02
Ok
Reply
2
Report
hotheadz88
·2022-06-02
Intriguing
Reply
2
Report
willwees
·2022-06-02
Just DCA on VOO
Reply
6
Report
YauDK
·2022-06-02
Ye ye
Reply
3
Report

Most Discussed

7x24

All

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"share":"https://ttm.financial/m/news/2240445539?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2022-06-02 11:33","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2240445539","market":"us","top_or_hot":-1,"title":"Roblox: Has The Metaverse Hype Train Crashed?","media":"Seekingalpha","content":"<div>\n<p>SummaryBy now, many \"hype trains\" have proverbially crashed in the past few months, given the drastic market correction.As a Metaverse stock, RBLX has also lost 78.8% of its value from its 1Y highs....</p>\n\n<a href=\"https://seekingalpha.com/article/4515706-roblox-metaverse-hype-train-crashed\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Roblox: Has The Metaverse Hype Train Crashed?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nRoblox: Has The Metaverse Hype Train Crashed?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-06-02 11:33 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4515706-roblox-metaverse-hype-train-crashed><strong>Seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryBy now, many \"hype trains\" have proverbially crashed in the past few months, given the drastic market correction.As a Metaverse stock, RBLX has also lost 78.8% of its value from its 1Y highs....</p>\n\n<a href=\"https://seekingalpha.com/article/4515706-roblox-metaverse-hype-train-crashed\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"RBLX","symbol_name":"Roblox Corporation","start_time":0,"source_url":"https://seekingalpha.com/article/4515706-roblox-metaverse-hype-train-crashed","article_id":"2240445539","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2240445539","pubTimestamp":1654140793,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"SummaryBy now, many \"hype trains\" have proverbially crashed in the past few months, given the drasti","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"RBLX":"Roblox Corporation"},"translate_title":"罗布洛克斯：元宇宙炒作列车坠毁了吗？","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RBLX":1},"content_text":"SummaryBy now, many \"hype trains\" have proverbially crashed in the past few months, given the drastic market correction.As a Metaverse stock, RBLX has also lost 78.8% of its value from its 1Y highs.Given the deceleration in user growth, bookings, and macro issues, we do not expect any stock recovery soon.Given its massive potential, the RBLX stock remains a speculative play, weighed down by its lack of profitability.harmpeti/iStock via Getty ImagesInvestment ThesisRoblox Corporation (NYSE:RBLX) had lost 78.8% of its value, given the continuous downwards slide since November 2021. Since other Metaverse related stocks, including Meta (FB) and Matterport (MTTR), havealso massively declined in the past six months, it is apparent that the party is over for now, though the former is mainly attributed to its reduced profitability from the Apple (AAPL)'s headwinds. In addition, stock recovery will not be soon, given its lack of profitability, the overly bearish market, and global macro conditions.Nonetheless, given its massive potential in the Metaverse, the RBLX stock remains a speculative long-term play for those with excess capital.RBLX Proved That The Metaverse Hype Train Had Stalled (For Now)RBLX Revenues, Net Income, Gross & Net Income MarginS&P Capital IQIn FQ1'22, RBLX reported revenues of $537.1M, representing a decline of 5.5% QoQ and an increase of 38.7% YoY. Despite the YoY improvement in its gross margin, from 19.6% in FQ1'21 to 21% in FQ1'22, it is apparent that the company is overspending on operational expenses, given that it reported widening net losses of -$160.2M for the quarter. It is also evident that despite RBLX's massive popularity, the company has yet to report profitability with -29.8% of net income margins by FQ1'22.RBLX R&D, Selling/ Marketing, and General/ Administrative ExpenseS&P Capital IQAs evident from the charts, RBLX spent a total of $818.12M in operational expenses in FY2021, representing 166% of its net losses for the year. In addition, the company seems to be growing its expenses in the last twelve months, with expenses of $264.63M in FQ1'22 alone, mainly attributed to the R&D segment at 67.1%.RBLX Cash/ Equivalents, FCF, and FCF MarginsS&P Capital IQIt is also evident that RBLX is not able to fully finance its operations for now, given that it only reported Free Cash Flows (FCF) of $565.84M in FY2021. However, given that it has a war chest of $3.13B of cash and equivalents on its balance sheet as of FQ1'22, the company may still weather the incoming storm in the short term. Nonetheless, assuming the bookings and user growth continue to fall, RBLX could see reduced FCF profitability moving forward, thereby implicating its future growth.RBLX's Branding PartnershipRBLX and AxiosHowever, there might be light at the end of the tunnel after all, since some of RBLX's efforts are paying off, with Gucci setting up its permanent digital town on its platform. The Gucci Town will feature digital shops selling unique RBLX-only collectibles, such as 3D bags and garments, while also including Gucci-inspired games, such as Tile Takeover or Flashlight Tag. Furthermore, certain Web3-based items, including NFTs, would also be available on Gucci Town's virtual shelves. As a result, we may see RBLX adopted by many other luxury brands as part of an immersive social and world-building virtual platform.In addition, RBLX also recently announced its partnership with Akili, the pioneer of medical treatments with breakthrough game technologies. The innovative integration of prescription video game treatments for ADHD patients in RBLX's virtual platform could potentially lead to new revenue avenues for the latter moving forward. Given that the EndeavorRx® is also US FDA approved, it is apparent that RBLX's real potential has yet to be fully uncovered, thereby giving the stock a speculative premium for the long-term. Craig Donato, Chief Business Officer of Roblox, said:Akili has captured our imagination with its prescription treatment for children with ADHD delivered through an action video game experience and shares our vision and enthusiasm for what's possible through interactive, digital experiences. We're proud to help them as they lead the effort to realize new potential in the field of medicine. (Akili)RBLX's Profitability Is Not Happening Anytime SoonRBLX Projected Revenue and Net IncomeS&P Capital IQSince our last article in April 2022, RBLX's growth has been downgraded by consensus estimates. Over the next four years, its revenue is expected to grow at a CAGR of 22.28%, instead of the original 28.88%. Since it is a further downgrade from our February 2022 analysis at a CAGR of 32.29%, it is apparent that consensus estimates are no longer as bullish on its growth prospects. In addition, RBLX's projected net income profitability seemed less likely now, with a widening estimated net loss of -31.2% at -$0.84B in FY2025, compared to -$0.64B from our April 2022 analysis.Furthermore, RBLX is expected to report revenues of $2.83B and net income of -$0.68B for FY2022, representing a YoY increase of 48.1% though declining profitability by -31.3%. These numbers are troubling since they also downgraded from our previous February 2021 analysis by -15.2%. As a result, RBLX investors should be concerned about its long-term prospects, given the decelerating bookings and user growth, expanding operational costs, reduced FCF profitability, and increasing SBC expenses.RBLX Total Debt and Share DilutionS&P Capital IQAs a result, it is evident that RBLX would need to continue to rely on debt and Share-Based Compensation (SBC) for its operations, given the lack of net income and potentially, reduced FCF profitability moving forward. In the last four quarters alone, the company had increased its total debt leveraged by over fivefold. Furthermore, its SBC expenses in FQ1'22 had also increased by 221% YoY to $112.29M. Assuming a similar rate moving forward, we may expect RBLX to incur up to $450M in SBC expenses for FY2022. As a result, investors who had bought in during IPO may also see their shares diluted for some time to come.RBLX Share-Based CompensationSeeking AlphaIn the meantime, we encourage you to read our previous article on RBLX, which would help you better understand its position and market opportunities.Meta Vs. Roblox: The Battle Of Metaverse Commission Rates - 47.5% Vs. 72%Roblox: Aggressively Diversifying Its User DemographicsSo, Is RBLX Stock A Buy, Sell, or Hold?RBLX 1Y EV/Revenue and P/E ValuationsS&P Capital IQRBLX is currently trading at an EV/NTM Revenue of 5.41x and NTM P/E of -26.45x, lower than its 1Y mean of 13.76x and -60.56x, respectively. The stock is also trading at $29.94 on 31 May 2022, down 78.8% from its 52 weeks high of $141.60 and nearing its 52 weeks low of $21.65.RBLX 1Y Stock PriceSeeking AlphaGiven the reality check in the current bearish market and a lower likelihood of net income profitability, we are downgrading the RBLX stock to hold for those who have yet to buy in. It is unlikely that the company will break out of this rut in the near and intermediate-term, given that the Metaverse hype train has stalled for now. Even Meta had guided for lowered investments for its Reality Labs moving forward, also known as Metaverse, given the temporary headwinds and macro issues faced by the social media and advertising giant.In addition, assuming that RBLX continues its similar under performance in the next few quarters, we may also expect the stock to further retrace to new lows. Nonetheless, given its thriving Metaverse platform, multiple future adaptations, and potentially successful aging up of its existing users, the stock could reverse its position in the long term. Thus, RBLX is suitable only for speculative investors with excess capital and overmuch patience.Therefore, weare downgrading RBLX stock as a Hold for now.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9050862693,"gmtCreate":1654171351512,"gmtModify":1676535406088,"author":{"id":"4087275030265320","authorId":"4087275030265320","name":"Cyberkien","avatar":"https://static.tigerbbs.com/9cf0950785302dba9fc6bb16c8df76ac","vip":1,"crmLevel":4,"crmLevelSwitch":1,"idStr":"4087275030265320","authorIdStr":"4087275030265320"},"htmlText":"Bet for future","listText":"Bet for future","text":"Bet for future","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9050862693","repostId":2240445539,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9050161334,"gmtCreate":1654147724928,"gmtModify":1676535403186,"author":{"id":"3583974841960176","authorId":"3583974841960176","name":"CIG","avatar":"https://static.tigerbbs.com/6c2077e2370e1ffcaca7e29b875be2be","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":5,"crmLevelSwitch":1,"idStr":"3583974841960176","authorIdStr":"3583974841960176"},"htmlText":"You downgraded to Hold, but I will still Buy!","listText":"You downgraded to Hold, but I will still Buy!","text":"You downgraded to Hold, but I will still Buy!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9050161334","repostId":2240445539,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9050163496,"gmtCreate":1654147439815,"gmtModify":1676535403179,"author":{"id":"3581675432544786","authorId":"3581675432544786","name":"Fiona888","avatar":"https://static.tigerbbs.com/42688ec73bb74970876cdb05131f23f7","vip":1,"hat":"https://static.tigerbbs.com/a3dee1aa3a3a3c1814833a4d3f8a5669","crmLevel":2,"crmLevelSwitch":0,"idStr":"3581675432544786","authorIdStr":"3581675432544786"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9050163496","repostId":2240445539,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9050183640,"gmtCreate":1654145829280,"gmtModify":1676535402938,"author":{"id":"4113822145562802","authorId":"4113822145562802","name":"hotheadz88","avatar":"https://community-static.tradeup.com/news/accdd6bf5a9ba8c6c1d7a0737af4bc16","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":3,"crmLevelSwitch":1,"idStr":"4113822145562802","authorIdStr":"4113822145562802"},"htmlText":"Intriguing&nbsp;","listText":"Intriguing&nbsp;","text":"Intriguing","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9050183640","repostId":2240445539,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9050133807,"gmtCreate":1654142441209,"gmtModify":1676535402399,"author":{"id":"4087526584403100","authorId":"4087526584403100","name":"willwees","avatar":"https://community-static.tradeup.com/news/bc2de1dfc9923a23848d1c226adff6c7","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":5,"crmLevelSwitch":0,"idStr":"4087526584403100","authorIdStr":"4087526584403100"},"htmlText":"Just DCA on VOO","listText":"Just DCA on VOO","text":"Just DCA on VOO","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9050133807","repostId":2240445539,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9050197462,"gmtCreate":1654142116456,"gmtModify":1676535402298,"author":{"id":"3580072870029753","authorId":"3580072870029753","name":"YauDK","avatar":"https://static.tigerbbs.com/4e00c10df4000c04392220903422d15f","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3580072870029753","authorIdStr":"3580072870029753"},"htmlText":"Ye ye&nbsp;","listText":"Ye ye&nbsp;","text":"Ye ye","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9050197462","repostId":2240445539,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":109,"commentSize":6,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}