Shares of Roblox (RBLX 2.43%) were down 6% as of 11:52 a.m. ET on Tuesday. There were no new company-specific developments to explain the drop. Instead, it appears investors are still digesting the company's disappointing second-quarter earnings report earlier this month.
Year to date, Roblox shares have dropped 55% versus the S&P 500's 10% decline. Investors are demanding better performance out of this top metaverse stock. A comparison with other gaming companies shows why Roblox could continue to underperform in the near term.
The big issue for investors is stagnant bookings (a non-GAAP measure of revenue), which weighed on profitability. This looks particularly disappointing considering the solid performance from other video game companies.
For example, Electronic Arts, the company behind Apex Legends and FIFA, reported a 22% year-over-year increase in bookings for the trailing-12-month period through the quarter ending in June.
Another relatively strong performer was Grand Theft Auto maker Take-Two Interactive, which posted a 41% year-over-year increase in bookings last quarter following its acquisition of Zynga.
Roblox's 4% decline in bookings looks weak next to peers in the video game industry.
Most companies that comprise the S&P 500 index have beaten earnings estimates this quarter, while a third have reported in-line or missed estimates. Roblox is part of the minority, so investors seem to be shuffling their cards to a stronger hand.
During Roblox's recent earnings call, management noted improvements in the platform that are attracting older users. This will be key in expanding the platform to a wider audience over time, but until the company reports stronger numbers on the top and bottom lines, the stock will likely remain under pressure in the near term.