Roblox: Shares Drop Sharply on Mixed March Key Metrics

In its March 2023 key metric release, Roblox announced that daily active users, or DAUs, increased 26% year over year to 66.2 million, bookings grew 25%-29% on a constant currency basis, and bookings per daily active user changed by a range of negative 1% to 3% after adjusting for the strong dollar. Roblox shares were down about 12% in early trading on April 17 as we believe that the market overreacted to the user base slightly declining sequentially from 67.3 million DAUs in February. The long-term picture for the firm remains impressive as Roblox had only 23.6 million DAUs in the first quarter of 2020. We are maintaining our $65 fair value estimate.