Roblox (RBLX) stock is down Thursday after the online gaming platform came up short on bookings and users for its fourth quarter and issued full-year guidance that also missed expectations.
In the three months ending December 31, Roblox said bookings increased 20.8% year over year to $1.36 billion and revenue was up 31.8% to $988.2 million. Its net loss improved to 33 cents per share from 52 cents in the year-ago period.
"We are pleased that we delivered Q4 2024 results at or above the guidance we provided on our Q3 2024 earnings call," Roblox Chief Financial Officer Michael Guthrie said in a statement.
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The CFO added that Roblox "continued to exceed the long term financial goals we communicated at our investor day in November 2023."
The market has recognized Roblox stock for the online gaming company's performance since November 15, 2023, RBLX rising nearly 90% vs a total return of 37% for the S&P 500.
At the same time, fourth-quarter results were mixed compared with analysts' expectations. Wall Street was anticipating bookings of $1.37 billion and a net loss of 45 cents per share, according to Investor's Business Daily.
Roblox also reported average daily users of 85.3 million, an increase of 19% from the year-ago period but short of an 88.4 million forecast.
For its first quarter, Roblox expects to achieve bookings in the range of $1.125 billion to $1.15 billion. The midpoint of this range, $1.1375 billion, matched analysts' expectations.
For the full year, Roblox anticipates bookings of $5.2 billion to $5.3 billion. The midpoint, $5.25 billion, missed a consensus forecast of $5.3 billion, according to CNBC.
Is Roblox stock a buy, sell or hold?
Wall Street remains bullish on the gaming platform. According to S&P Global Market Intelligence, the consensus recommendation among analysts who follow the stock is a Buy. But price targets haven't kept up with RBLX's recent run higher.
Indeed, shares are up more than 65% over the last year even after accounting for Thursday's decline of more than 10%. The average analyst price target of $62.75 represents a discount of more than 6% to current levels.
Financial services firm Wedbush is one of the most bullish outfits on RBLX stock with an Outperform rating (equivalent to a Buy) and an $83 price target.
"We see Roblox as the most compelling growth opportunity in the video game sector given its large and expanding user base, its slate of new and upcoming products, and the potential to unlock additional profit drivers within its business," wrote Wedbush analyst Michael Pachter in a note ahead of the earnings announcement.
Pachter said Roblox "has begun monetizing a large percentage of its non-payers through advertising," explaining that 80% of engagement hours generate no revenue.
The analyst added that "Roblox is offering its content partners higher revenue share on in-app purchases," an effort "likely to attract higher-quality content to the platform."
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