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Roblox stock dives 20% after earnings miss


Nike and Roblox have teamed up to create a virtual world named Niketown.

Source: Nike

RobloxPremarket trading has seen shares fall by more than 21% reporting earningsIt was a disappointment.

After the bell rang, the gaming company announced earnings Tuesday. However, it missed Wall Street’s estimates of the top and bottom lines. The fourth quarter’s revenue was $770m, or 772 million, as per the consensus Refinitiv estimates. Also, it reported a 25% loss per share which is more than the expected 13 cents. Roblox claimed that 49.5million users were active on a daily basis during the quarter. This is 33% more than last year.

Roblox, an open-source gaming platform allows users to build their interactive “worlds” from scratch. This was the company that went public for the first time in the history of the metaverse. Virtual currency is sold to the players to be used for purchasing digital goods in the game. Recently, the company partnered with businesses like NikeNFL

Analysts expressed concern about slowing bookings and the outlook.

“Our key takeaway from Roblox’s 4Q update… January 22′ bookings experienced a deceleration relative to past months, up just 2%-3%, y/y as compared to October/November/December ’21 at +15%/+23%/+21%, respectively, for example,” Stifel analysts said in a note on Tuesday evening.

“Furthermore the company stated y/y bookings comps “should improve starting within the May-June timeline,” leaving us wondering what it means for February-April. What is the reason for this anticipated slowdown?