Roblox stock collapsed Thursday after the online gaming and social platform missed Wall Street's targets for users and bookings in the fourth quarter.
Roblox lost 33 cents a share on bookings of $1.36 billion in the quarter ended Dec. 31. Analysts polled by FactSet had expected Roblox to lose 45 cents a share on bookings of $1.37 billion. In the year-earlier period, Roblox lost 52 cents a share on bookings of $1.13 billion.
Roblox reported 85.3 million average daily active users, up 19% year over year, in the fourth quarter. However, analysts had expected 88.4 million.
Based on the midpoint of its guidance, Roblox expects bookings in the first quarter of $1.14 billion, matching the consensus estimate.
For the full year, Roblox guided to bookings of $5.2 billion to $5.3 billion. The midpoint of $5.25 billion would translate to year-over-year growth of 20%. In 2024, its bookings rose 24%.
The company has been investing heavily to build out its youth-centric version of the metaverse, a 3D virtual space for people to socialize and play games. Roblox online experiences range from gaming and hangouts to concerts, sports, fashion shows, education and entertainment.
Roblox Stock Gets Wings Clipped
On the stock market today, Roblox stock plunged as much as 20.4% to 60.11 before bouncing off its 50-day moving average line. It ended the regular session down 11.1% to 67.12.
Roblox stock had been on a tear recently and was up 30% year to date through Wednesday's close.
"Roblox had a strong 2024, driven by our commitment to innovation and community," Chief Executive David Baszucki said in a news release. "We're building a platform that goes beyond technology — it's about fostering genuine connections."
He added, "As we aim to support 10% of the global gaming content market, we'll continue investing in our virtual economy, app performance, and AI-powered discovery and safety, empowering creators and enhancing the user experience."
Benchmark analyst Mike Hickey reiterated his buy rating on Roblox stock after the report. He raised his price target to 71 from 60.
"We believe in the company's long-term secular growth strategy," Hickey said in a client note.
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