Roblox Q3 preview: Where next for the Roblox share price?

Roblox is prime position to benefit as the world moves closer toward the metaverse. We explain what to expect from the earnings and consider how Roblox shares could react.

Crypto 8

When will Roblox release Q3 earnings?

Roblox is scheduled to release third quarter earnings on Tuesday November 9.

Notably, the company has an investor day pencilled in for Tuesday November 16.

 

Roblox Q3 earnings preview: what to expect from the results

Roblox continues to rapidly acquire new users and improve engagement to keep them using its platform, driven by its success in attracting more users in international markets outside of North America and, even more importantly, more older users. In fact, Roblox said it was somewhere between 2.5x to 4.4x larger in the second quarter of 2021 than it was two years earlier in the second quarter of 2019, spurred on by the boom in online gaming seen since the pandemic erupted last year.

However, the one area for concern in its last set of results was a drop in average bookings per daily active user. Although this rose slightly year-on-year in the second quarter, Roblox said this was down 5% to 7% in July, painting an uncertain picture for the third quarter. This has come under pressure mainly as a result of easing restrictions, prompting people to spend less time online and more time out and about, as well as tougher comparatives from last year. Faster expansion in countries with lower incomes than the US and Canada, such as in Latin America and Asia, has also started to weigh on the amount each user spends.

Fortunately, the rapid growth in overall user numbers means Roblox remains in a strong position to keep on delivering strong growth in the third quarter and beyond. Analysts believe Roblox can deliver 30% growth in daily active users in 2021. DAUs grew 42% year-on-year in the second quarter, with slightly faster growth from users over the age of 13.

Bookings, which represents the value of its virtual currency Robux used by users to transact in Roblox’s metaverse, are expected to come in at $636.5 million in the third quarter compared to $496.5 million the year before. However, that would have slipped from the record $665.5 million booked in the second quarter of 2021.

Revenue is forecast to jump to $639.9 million from just $242.2 million last year, also marking a significant rise from the $454.1 million in sales booked in the second quarter.

The net loss is forecast to come in at $86.2 million, wider than the $49.4 million loss booked the year before.

Roblox shares have lost 17% since hitting all-time highs in early June and currently trade at $82.53. Still, that is up from the $64.50 Roblox shares started trading at after its direct listing back in March. The 10 brokers covering Roblox currently have an average Buy rating on the stock with a target price of $89.89, implying there is some 8.9% potential upside from the current share price.

 

Where next for the Roblox share price?

After reaching an all-time high in early June, the Roblox share price has been trending lower, hitting a 6-month low of $70. The price has extended its rebounded from this level facing rejection at the multi-month trendline. 

Currently the price trades relatively range bound, capped on the upper band by $86, the October high, and limited on the lower side by the 50 sma at $77.35. 

The RSI heading higher in bullish territory plus a push above the 200 sma is keeping buyers optimistic.  

Bulls may want to wait for a breakout above $86 to target $90, the September high, and $94.70, the late June high. 

Meanwhile sellers could look for a break below $77.90, the 50 sma, to target $70, the psychological level and October low. 

Where next for the Roblox share price?

 

How to trade Roblox shares

You can trade Roblox shares with Forex.com in just four steps:

  1. Open a Forex.com account, or log-in if you’re already a customer.
  2. Search for ‘Roblox’ in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account