Roblox (RBLX) shares tumble following 'disappointing' November metrics

Roblox (NYSE: RBLX) shares tumbled in early Thursday trading after the company reported its key metrics for November, with the company impacted by foreign exchange headwinds.

Roblox shares are down almost 15% at the time of writing.

"The strengthening of the US Dollar against the Euro, British Pound, and other foreign currencies during 2022 has had an adverse impact on bookings. We estimate that the impact of foreign currency fluctuations led to a reduction of approximately 4-5% in the year-over-year growth rate for November bookings," Roblox said in its report.

The gaming platform's estimated bookings were between $222 million and $225 million, up 5% to 7% year-over-year, with its estimated average bookings per daily active user between $3.92 and $3.97, down 7% to 9%.

Meanwhile, daily active users came in at 56.7 million, up 15%, and hours engaged rose 10% to 3.9 billion, with estimated revenue between $190 million and $193 million, rising from 1% to 3% year-over-year.

Reacting to the report, Benchmark analyst Mike Hickey said Roblox "reported disappointing November key performance indicators; we are not surprised."

"We believe RBLX's video game platform is vulnerable to current and emerging negative macroeconomic trends including inflation, unemployment, and wealth reduction. We are astonished over RBLX's decision to continue elevated investment spend that should exaggerate a significantly challenging operating environment and deteriorate free cash flow," said Hickey, who has a Sell rating and $21 price target on the stock.

"We see continued execution risk on both revenue growth and profitability. RBLX remains painfully expensive in our view, with meaningful room for further valuation deterioration. We think a lack of clear vision and discipline have challenged CEO."

By Sam Boughedda

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