Roblox Stats For May Seen As 'Not Enough' To Sustain High-Flying Shares

Shares of Roblox (RBLX) are trading lower on Wednesday after the online gaming company reported May daily active users of 43M, up 28% from May of last year but down 1% from April. Roblox also said that average bookings per daily active user are expected to be down 2%-3% year-over-year. Despite the news, Wall Street analysts kept they bullish ratings on the stock, with Morgan Stanley analyst Brian Nowak lowering his second-quarter estimates but saying the long-term view remains unchanged.

USAGE RATES: Roblox has released its May 2021 key metrics. The company said its daily active users were 43.0M, up 28% from May of last year and down 1% from 43.3M in April 2021. Hours engaged were 3.2B, up 9% year-over-year and up 1% from 3.2 billion in April 2021. Bookings are estimated to be between $216M-$219M, up 24%-26% year-over-year. Average Bookings per DAU are estimated to be between $5.02-$5.09, down 2%-3% year-over-year. Revenue is estimated to be between $149M-$151M, up 123%-126% year-over-year.

SHARES LIKELY RANGE-BOUND: Noting that Roblox shares are trading down after its May daily active users declined 1% month-over-month, JPMorgan analyst Alexia Quadrani says this is consistent with her modeling but notes that the average bookings per daily active user decrease was more than expected. Taking the average reported figure for April and May, and assuming flat performance into June, would imply bookings for the second quarter at $679M, below the consensus at $683M, Quadrani contended. She admitted, however, that this extrapolation may be "generous," given the company's June 2020 bookings were down an estimated 3% month-over-month. Quadrani's long-term view on Roblox remains positive but she believes the shares are likely to be range-bound given a lack of catalysts until June data is published in mid-July and as the Street continues to monitor the extent of the slowdown during reopening/back to school over the next few months. The analyst kept an Overweight rating on Roblox.

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