![]() Roblox isn't crazy expensive, but the stock is no bargain for 20% sales growth. The stock now has a market cap topping $25 billion, and the company is talking about monthly bookings (revenues) only in the $250 million range. The stock was one of our big picks in the mid-$20s last year, but Roblox isn't appealing above $40. While the stock market has traded weak for over a year now, Roblox has actually doubled off the lows. Remember, the March DAUs were up 26% YoY while the February DAUs were up only 22% YoY. The March DAUs were down slightly from the 67.3 million reported for February, but Roblox has volatile monthly numbers probably leading to the desire to quit reporting monthly metrics. The mobile gaming platform now has a user base at 66.2 million, with strong sequential growth from the 58.8 million average during Q4'22. Roblox only averaged 23.6 million DAUs back in Q1'20 before the covid boost occurred. The stock should be valued based on this type of growth. What ultimately matters is that Roblox is back to consistent 20%+ growth in users, engagement, and bookings. These areas have far lower average bookings, leading to lower averages when new users are added in these areas. ![]() The only number the market could gripe about is the ABPDAU metric, but this number is complicated due to a lot of the DAU growth coming from areas outside the US. Roblox even reported engagement was up 26% leading to bookings growth of ~25% with constant currency bookings up a very strong 25% to 29%. Estimated average bookings per daily active user (ABPDAU) were between $3.73 and $3.85, which represents a year-over-year change of -2% - +1%.Īny company with 26% user growth in this environment is in a strong position.Estimated bookings were between $247 million and $255 million, up 23% - 27% YoY.Estimated revenue was between $212 million and $223 million, up 15% - 21% YoY.Hours engaged were 4.8 billion, up 26% YoY.Daily active users (DAUs) were 66.2 million, up 26% YoY.The stock might have fallen from elevated levels, but Roblox reported strong March metrics as follows: ![]() My investment thesis is Neutral on the stock due solely to valuation with the rally above $40. The mobile gaming platform reported strong growth again, as the company has now easily topped the covid peaks. Roblox ( NYSE: RBLX) dipped after the company provided a corporate update for March, mainly due to the stock valuation running too far. ![]()
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