Roblox Q2 Results Miss Estimates; Shares Fall 5.1%

Shares of online gaming platform Roblox Corporation (RBLX) declined 5.1% to close at $75.50 on Monday after the company reported weaker-than-expected results for the second quarter ended June 30, 2021.

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Quarterly revenues stood at $454.1 million, up 127% from the same period last year. However, the figure failed to surpass the Street’s estimate of $689.85 million.

The company reported a loss per share of $0.25, narrower than the previous year’s loss of $0.40 per share. Analysts had expected earnings per share (EPS) of $0.23.

In other key operating metrics, the company’s Average Daily Active Users (DAUs) stood at 43.2 million, up 29% from the previous year. Hours engaged in the platform were 9.7 billion, which denotes a growth of 13% from the year-ago period. Also, bookings rose 35% year-over-year to $665.5 million.

The CEO of Roblox, David Baszucki, said, “These results are fueled both by our creator ecosystem and by the millions of people around the globe who want to connect and share new experiences every day on Roblox.” (See Roblox stock chart on TipRanks)

Last month, Benchmark Co. analyst Mike Hickey initiated coverage on the stock with a Sell rating and a price target of $75, which implies downside potential of 5.7% from current levels.

According to Hickey, the business offers “investors a unique and compelling investment opportunity”. However, as the pandemic restrictions are gradually being lifted, the analyst feels that the engagement in the platform may drop.

Consensus among analysts is a Moderate Buy based on 5 Buys and 1 Sell. The average Roblox price target of $90.20 implies upside potential of 13.4% from current levels.

Roblox scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 14.5% over the past year.