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Analysis of Roblox Corporation.

Analysis of Roblox Corporation.

17 August 2022

Roblox: business is growing, but who will believe it?

Roblox is one of the largest gaming platforms. The company’s shares are highly volatile and emotional. Roblox has presented one of the most disastrous reports in its history. Moreover, this is the sixth consecutive negative report. Let’s see what’s wrong here and whether there is a strategic trading idea. 

Strengths of reporting:

  • business growth compared to a year earlier;
  • the number of users is increasing;
  • the interest in the project and the involvement of users remains.

Risks:

  • revenue of $591.2 million with a forecast of $693.2 million;
  • loss per share of $0.3 versus the forecast loss of $0.25 per security;
  • increase in daily users of $52.2 million versus the forecast of  $54.1 million;
  • average check -21% YoY to $12.25.

A nuance worth paying attention to: Roblox spends enormous money on the purchase of equipment, that is, in fact, it is an investment expense. During the quarter, the volume of expenses is estimated at $90 million. Later, these invested finances will have a positive effect, but not now.

Roblox has a financial reserve. According to various estimates, it amounts to $2.8-3.1 billion. Even if the company does not earn money this year and next, it will stay afloat. The only question is who is willing to wait.

The consensus forecast for Roblox shares is $70-74.

The daily trading schedule of Roblox securities looks moderately optimistic. The MACD indicator is growing in the positive zone and confirms the buy signal. The Stochastic oscillator is being corrected in the positive zone, but still leaves a buy signal in force.

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    17 August 2022
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