On Thursday, Morgan Stanley (NYSE:MS) updated its stance on Roblox Corp. (NYSE:RBLX), increasing the price target to $38.00 from the previous $35.00. The firm has retained an Equalweight rating on the shares of the online gaming platform.
The adjustment follows the announcement of Roblox's second-quarter results, which indicated a significant shift in the company's performance trajectory after a period of temporary weakness observed in April. Despite the bookings for the quarter not meeting investor expectations, the company's profit margins were highlighted as a particularly positive aspect of the report.
Roblox Corporation has reported impressive Q2 2024 earnings, demonstrating considerable growth with revenue reaching $893.5 million, a 31% increase year-over-year. Bookings also exceeded expectations at $955 million, a rise of 22% compared to the previous year. The company also noted a record 79.5 million daily active users, marking a 21% rise year-over-year, with significant user growth observed in Japan and India.
Furthermore, Roblox announced the departure of CFO Mike Guthrie and has begun the search for his successor. The company's Q3 revenue is projected to be between $860 million and $885 million, with bookings estimated between $1 billion and $1.025 billion. However, a consolidated net loss between negative $275 million and negative $255 million is expected for Q3.
In terms of future expectations, Roblox anticipates revenue guidance for the full year to be raised to between $3.49 billion and $3.54 billion, with bookings expected between $4.18 billion and $4.23 billion. The company's focus on AI-driven moderation initiatives and potential for advertising revenue growth through strategic opportunities were also highlighted.
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