Shares of the company offering the popular gaming platform Roblox (RBLX.US) are losing nearly 15% in pre-session trading. The company's Q4 2021 report fell short of analysts' expectations on Bloomberg News service:
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Revenue (bookings): 770 million USD; Expectations: 786 million USD
- Loss per share: 0.25 USD; Expectations: 0.11 USD
Despite failing to meet the inflated expectations of Wall Street analysts, the company posted impressive growth on several fronts:
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Create account Try a demo Download mobile app Download mobile app- The company's revenue for 2021 increased 108% over 2020.
- User growth of 49.5 million in Q4 2021 (33% over Q4 2020). Wall Street was expecting an increase of 50.1 million.
According to the company's CEO David Baszucki, Roblox with nearly 55 million daily active users on the platform 'is an increasingly integral part of people's lives'. The platform gained popularity during the COVID-19 pandemic by allowing players to socialize. The game, however, has been playable for 15 years and has managed to maintain its popularity despite the lack of significant deals with big portals like Facebook and Google for many years. In 2022, the company wants to focus on 'deeper forms of communication and immersion in the platform'.
Roblox went public in spring 2021 and quickly established itself as one of the leading platforms in the Metaverse, a 3D virtual world space. In the platform, users can earn money, the game fits into the recently popular 'play-to-earn' trend. In Q4 2021, Roblox presented a deal with the NFL hockey league, popular in the US. It allows players to participate in the virtual management of the NFL league's infrastructure. The company has signed agreements in the past involving display advertising with companies such as Hyundai, Nike and Vans. However, the game has equally strong competition from platforms such as Meta Horizon Worlds, Fortnite and Decentraland.
The company's stock is worth watching. Some bargain-seeking investors may turn their attention towards it and find today's sell-off exaggerated, seeing it as a buying opportunity. Technology companies have recently experienced a sell-off resulting from the unsettled global situation. In such circumstances, many investors are exiting risky and volatile investments, which Roblox shares continue to be.
Roblox (RBLX.US), D1 interval. The company's shares lost over 20% before the market open and if the current downward momentum continues, it will be possible to test the psychological support near USD 54 per share. Weak results surprised the demand side, which managed to break share prices out of the medium-term downtrend and headed towards the resistance set by the 23.6% Fibo retracement. Source: xStation 5
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