Roblox Stock Falls After “Disappointing” November Numbers

Roblox Stock

Roblox (NYSE:RBLX)

After reporting its key metrics for November, Roblox (NYSE:RBLX) stock dropped sharply at the beginning of trade on Thursday due to the negative effects of foreign currency headwinds.

Roblox stock prices had dropped by roughly 15% at the time of this writing.

“A negative effect on bookings has been seen as a result of the appreciation of the US Dollar compared to the Euro, the British Pound, and other foreign currencies throughout the year 2022. We believe that the effect of swings in foreign currencies resulted in a fall of around 4–5% in November’s year-over-year growth rate for bookings. “According to the report that Roblox put out, “

The gaming platform’s anticipated bookings were between $222 million and $225 million, representing a year-over-year increase of between 5% and 7%. On the other hand, the platform’s estimated average bookings per daily active user represented a year-over-year decrease of between 7% and 9%.

During this time, the number of daily active users reached 56.7 million, an increase of 15%; the number of hours engaged increased by 10%, reaching 3.9 billion; and the expected income ranged from $190 million to $193 million, an increase of 1% to 3% year-over-year.

Benchmark analysts said in response to the news that Roblox “reported dismal November key performance metrics; we are not shocked.” 

“We believe that the RBLX video gaming platform is susceptible to existing and developing patterns of negative macroeconomic trends such as inflation, unemployment, and a decline in wealth. We are taken aback by RBLX’s decision to maintain its high level of investment spending, which is likely to exacerbate an already significantly tricky operating environment and worsen the company’s free cash flow, “according to the analysts who have given the Roblox stock a Sell rating and have set a price target of $21 for it.

“We anticipate that the execution risk will continue to be detrimental to sales growth and profitability. RBLX’s valuation has a significant opportunity for further decline, and the company’s stock price is still extremely high. We believe the CEO’s issue results from a lack of clear vision and discipline.”

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