Roblox (RBLX) soars over 20% on Q4 earnings beat

Roblox (RBLX) stock is one of the biggest movers today alongside Airbnb, Barclays, Silvergate Capital and more.

Shares of Roblox are currently up over 24% at time of writing. The catalyst was Q4 2022 earnings beating analyst expectations. Here is a summary of the numbers:

Loss per share: 48 cent loss vs. 52 cent loss per share expected, according to a Refinitiv survey of analysts
Revenue (bookings): $899.4 million vs. $881.4 million expected, according to Refinitiv

Roblox’s revenue figure is known as bookings, which includes sales recognized during the quarter and deferred revenue. Roblox generates revenue from sales of its virtual currency (Robux) which players use to buy clothes for their avatars and other premium features. Bookings rose 17% year over year.

“Bookings accelerated meaningfully in December and January, with year over year growth exceeding 20% in both months,” said Michael Guthrie, Roblox’s chief financial officer. “Growth was strong across all geographies and age groups with particular strength among users above 17 years old.”

Average daily users came up to 58.8 million which is up 19% from a year earlier. Users spent more than 12.8 billion hours in game in the fourth quarter, which is up 18% year over year.

A net loss of $289.9 million for the quarter ended December 31st 2022 was reported. Or a loss of 48 cents per share. Average bookings per daily active user was $15.29, which is down 2% year over year.

Roblox said that for January, its estimated bookings were between $267 million and $271 million, up 22%-24% from the same period the prior year on a constant-currency basis. Its average daily users for January were 65.0 million, up from 61.5 million in December.

Shares surged 25% to $44.66 in early trading on Wednesday. The stock is up 58% this year so far, although it remains well below the peak of more than $140 it reached in late 2021.

Recently, I highlighted the reversal pattern on Roblox, which triggered with a close above $35. We even got a retest confirmation which just adds to the bullish scenario. Today’s earnings pop continues the momentum and the major resistance at $50 is the next target. Interim support comes in at $40.

From a market structure perspective, Roblox gets interesting with the $50 break. This would trigger a major breakout of a range going back to April 2022. A range which would be broken after a downtrend. This would signify a new major uptrend for the stock.