The stock price is rising because investors appreciated what they heard from the metaverse pioneer.
For several quarters, the stock was under pressure as investors concerned about how consumer involvement would change when economies reopened. Even while the update allayed some of those fears, RBLX stock is still almost 80% behind its all-time high. Let’s take a deeper look at some of the Q1 numbers to see if investors should buy the company right now.
RBLX is free to register and use and it is particularly popular among the younger generation. The business earns money by selling Robux, an in-game currency. Some platform goods and experiences need Robux to use and are not available to non-paying users. RBLX had 53.1 million daily active users in April, up 23% from the same month last year. It managed to attract new participants even when economies recovered and children returned to school.
However, there are still indicators of a slowdown in several areas of the company’s operations. In Q1, for example, user engagement in the United States and Canada, the company’s most profitable market, fell 10% year over year. That was the fourth quarter in a row that engagement did not increase year over year. Furthermore, the average bookings per day active user (ABPDAU) is decreasing. In comparison to the same quarter in the previous year, ABPDAU decreased by 25%. It was the third consecutive quarter of deterioration and the trend is continuing. There was surely enough bad data to satisfy the investor who sees the glass as half empty.
There was, however, more good news than bad. According to management, booking patterns increased in April compared to March. The firm had predicted that the decline in bookings would reverse in the May to June months for several quarters, and it appears that they were accurate. If the pattern continues, it might indicate that the challenges from closing economies have subsided and RBLXâ€™s growth could pick up.
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