Weak November Average Revenue User Growth Hammers Roblox Shares; Maintaining $65 FVE

In its November 2022 key metric release, Roblox announced that daily active users, or DAU, increased 15% year over year to 56.7 million, bookings grew 10%-12% on a constant currency basis, and bookings per daily active user, or ABPDAU, fell 3%-5% after adjusting for the strong dollar. Roblox shares were down over 17% in morning trading as we believe that the market overreacted to the non-adjusted ABPDAU decline of 7%-9%. As the platform continues to add users outside the U.S., investors should expect ABPDAU to decrease even in constant currency, with the strong dollar exacerbating the decline. We are maintaining our $65 fair value estimate.