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Roblox Corp Ordinary Shares - Class A RBLX

Morningstar Rating
$32.96 +0.29 (0.89%)
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Company Report

Roblox Earnings: Weakening Engagement Has Weighed on Growth; Fair Value Estimate Reduced

Roblox delivered 19% year-over-year bookings growth during the first quarter, meeting the midpoint of management’s guidance. However, player engagement tailed off during the quarter. While management believes it has made changes to address the underlying causes of this shift, it provided a tepid outlook for second-quarter bookings growth (about 13% at the midpoint) and cut its full-year growth outlook to about 15% from 20%. Ups and downs are expected, and we’ve trimmed our growth expectations, cutting our fair value estimate to $50 from $60. We still believe that the market is overly discounting Roblox’s long-term potential and that the shares are attractive.

Price vs Fair Value

RBLX is trading at a 23% premium.
Price
$32.96
Fair Value
$34.00
Uncertainty
Very High
1-Star Price
$59.60
5-Star Price
$55.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Roblox is uniquely positioned to take advantage of the trend toward increased screen time among younger consumers.

Bears

Roblox’s tremendous subscriber growth was highly stimulated by the pandemic. Growth, especially in established markets, has slowed sharply.

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News

Trading Information

Previous Close Price
$32.67
Day Range
$32.3033.36
52-Week Range
$24.8847.20
Bid/Ask
$32.30 / $32.50
Market Cap
$21.09 Bil
Volume/Avg
1,982 / 8.2 Mil

Key Statistics

Price/Earnings (Normalized)
Price/Sales
6.77
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Roblox operates an online video game platform that lets young gamers create, develop, and monetize games (or “experiences”) for other players. The firm effectively offers its developers a hybrid of a game engine, publishing platform, online hosting and services, marketplace with payment processing, and social network. The platform is a closed garden that Roblox controls, earning revenue in multiple places while benefiting from outsourced game development. Unlike traditional video game publishers, Roblox is more focused on the creation of new tools and monetization techniques for its developers then creating new games or franchises.
Sector
Communication Services
Industry
Electronic Gaming & Multimedia
Stock Style Box
Mid Growth
Total Number of Employees
2,457

Comparables

Valuation

Metric
RBLX
DUOL
KIND
Price/Earnings (Normalized)
178.35
Price/Book Value
285.6410.701.83
Price/Sales
6.7714.624.38
Price/Cash Flow
55.85
Price/Earnings
RBLX
DUOL
KIND

Financial Strength

Metric
RBLX
DUOL
KIND
Quick Ratio
0.883.0215.74
Current Ratio
1.073.2416.01
Interest Coverage
−32.43
Quick Ratio
RBLX
DUOL
KIND

Profitability

Metric
RBLX
DUOL
KIND
Return on Assets (Normalized)
−7.35%15.89%−11.06%
Return on Equity (Normalized)
−312.07%22.85%−12.93%
Return on Invested Capital (Normalized)
−28.11%16.45%−14.91%
Return on Assets
RBLX
DUOL
KIND
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Electronic Gaming & Multimedia Industry Comparables

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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
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NTDOY
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NETTF
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NTES
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EA
Electronic Arts IncWkfybfzckSqqmz$35.2 Bil
TTWO
Take-Two Interactive Software IncHnvmmqhbCbvnkx$26.5 Bil
NEXOF
NEXON Co LtdBhsyqwy$13.2 Bil
NEXOY
NEXON Co Ltd ADRRmswxwh$13.2 Bil
BILI
Bilibili Inc ADRRlfgknlvJjwf$5.9 Bil

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