Roblox stock tumbled on Wednesday after the video game platform missed Wall Street's estimates for the fourth quarter.
The San Mateo, Calif.-based company late Tuesday said it lost 25 cents a share on bookings of $770.1 million in the December quarter. Analysts had expected Roblox to lose 12 cents a share on bookings of $772 million, according to FactSet. In the year-earlier period, it lost 30 cents a share on bookings of $642 million.
On the plus side, Roblox had a record number of daily active users in the fourth quarter. It averaged 49.5 million daily active users in the period, up 33% year over year. In the month of January, the number increased to 54.7 million.
Average bookings per daily active user were $15.57 in the fourth quarter, vs. $13.49 in the third quarter.
RBLX Stock Tumbles After Report
On the stock market today, Roblox stock tumbled 26.5% to close at 53.87. During the regular session Tuesday, Roblox stock rose 7.3% to 73.30.
"With nearly 55 million daily active users, Roblox is increasingly an integral part of people's lives," Chief Executive David Baszucki said in a news release. "As we look ahead to 2022, we will continue to develop our technology to enable deeper forms of communication, immersion and expression on our platform."
Analysts expressed concern about slowing bookings growth and monetization as the world reopens after the Covid-19 pandemic.
"Like many content platforms, Roblox is seeing difficult compares and the impact of reopening," Jefferies analyst Andrew Uerkwitz said in a note to clients. "Once stuck-inside kids and teens are now spending weekdays off their devices and out in the real world."
Uerkwitz rates Roblox stock as hold with a price target of 70.
Roblox Stock A Play On The Metaverse
Early Tuesday, BBC reported that Roblox's youth-centric social gaming platform contains sexual content. The news organization said Roblox has a problem with user-generated spaces called "condos" where people talk about sex and their avatars can have virtual sex. Roblox told BBC that the activity involves "an extremely small subset of users" and those sites are taken down when they're discovered.
Roblox provides a platform for playing video games and socializing in 3D virtual worlds. But Roblox stock is considered a play on the metaverse, an immersive, next-generation version of the internet.
Roblox stock spiked to a record high of 141.60 on Nov. 22 amid hype about the metaverse spurred by the rebranding of Facebook to Meta Platforms.
Roblox stock ranks ninth out of 21 stocks in IBD's Computer Software-Gaming industry group, according to IBD Stock Checkup. However, it has a subpar IBD Composite Rating of 37 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
