In this video, I will be talking about Roblox (RBLX +8.96%) and whether it's a buy going into 2022 despite being up 45% this year. You can find the video below, but here are some highlights.
- It's trading at 34 times trailing-12-months (TTM) revenue but grew revenue over 100% year over year. But the stock has gone down in recent weeks because some key metrics coming out of November were disappointing.
- Roblox ended the month of November with 49.4 million daily active users (DAUs), an increase of 35% year over year (YOY). Users spent 3.6 billion hours on the platform during that month, an increase of 32% YOY. Estimated bookings for November were between $208 million and $211 million, up 22% to 24% YOY.
- Estimated average bookings per daily active user were between $4.21 and $4.27, down 8% to 9% YOY. And revenue is estimated to be between $184 million and $187 million, up 84% to 87% YOY.
- Compared to October, in which Roblox was down for around three days because of the outage, these numbers could have been better since kids were home for Thanksgiving and there was no outage.
- Also, the fact that estimated average bookings per daily active user were between $4.21 and $4.27, down 8% to 9% YOY, raised some questions. But these concerns were addressed by management: "The small decline was due to a shift in the geographic mix of the user base."
- At the recent investor day in November, management reiterated its long-term goal of 1 billion daily active users. There's still a long way to go, but I can see this happening eventually. More and more big companies are turning to these platforms to advertise and engage with users (for example, Nike's Nikeland, and Chipotle's Boorito Maze).
For the full insights, do watch the video below, and consider subscribing.
*Stock prices used were the closing prices of Dec. 17, 2021. The video was published on Dec. 19, 2021.
