Roblox Q3 Earnings Ahead: Street sees more than 30% decline in EPS

[Roblox Headquarters]
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Online gaming platform Roblox (RBLX [https://seekingalpha.com/symbol/RBLX]) is set to announce its third-quarter earnings results on Thursday, October 30th, before the opening bell.

Street expects the company to report a loss per share of $0.51, a more than 37% decline from last year, on revenue of $1.69B, an about 50% increase from last year.

Morgan Stanley said recently that it remains bullish on Roblox and views it as a clear leader in the next generation of entertainment platforms.

The research firm expects Roblox to reach beyond one billion monthly active users [https://seekingalpha.com/news/4503854-morgan-stanley-remains-bullish-on-roblox-as-its-forecasts-1b-maus-by-2030] by 2030 and pointed to the fact that user growth on its platform has risen about 10x since 2018.

“We estimate that the platform now has 400 million total monthly active users, which is 2x larger than the combined ~200 million installed base of PlayStation, Xbox, and Switch… and nearly one quarter the size of YouTube's audience, which itself is a key proof point that user-generated content platforms only deepen their moats as they scale,” Morgan Stanley said on Tuesday.

“Ultimately, we estimate that RBLX is currently just 3% penetrated in its opportunity among 5-34 year olds (with room to expand demographics over time) and see a path to >1bn users from here,” they added.

Over the last one year, Roblox has beaten EPS estimates [https://seekingalpha.com/symbol/RBLX/earnings/eps-surprise-summary] 100% of the time and has beaten revenue estimates 50% of the time.

SA analyst Sarfatti Investment Research has rated [https://seekingalpha.com/article/4829601-roblox-profitability-challenges-masked-by-topline-growth] Roblox Corporation as Sell, citing unsustainable valuation and lack of a clear path to profitability.

The platform's aging design and stagnating growth in higher-income regions raise concerns about declining user engagement and revenue per user, according to the analyst.

Over the last three months, EPS estimates have seen nine downward revisions, while revenue estimates have seen 19 upward revisions.

MORE ON ROBLOX

* Roblox's Future: Balancing Risks And Opportunities With A Hold Rating [https://seekingalpha.com/article/4830194-robloxs-future-balancing-risks-and-opportunities-with-a-hold-rating]
* Roblox: Profitability Challenges Masked By Top Line Growth [https://seekingalpha.com/article/4829601-roblox-profitability-challenges-masked-by-topline-growth]
* Roblox's Platform Is Maturing Faster Than Wall Street Thinks [https://seekingalpha.com/article/4823953-roblox-platform-maturing-faster-wall-street-thinks]
* ClearBridge Growth Strategy Fund Buys RBLX, NTRA and XPO; exits UNH, ACN [https://seekingalpha.com/news/4504263-clearbridge-growth-strategy-fund-buys-rblx-ntra-and-xpo-exits-unh-acn]
* Mattel and Roblox to launch new slate of games starting with Monster High [https://seekingalpha.com/news/4504320-mattel-and-roblox-to-launch-new-slate-of-games-starting-with-monster-high]