The Truth About Roblox's Worst Earnings Crash | RBLX Stock Analysis

本站添加: 2026-05-03

[00:00:01]Hello everybody. Welcome back to another valuation investing video and today in this video I'll be going over Roblox stock because they just reported their earnings in for their first quarter 2026 and it was pretty abysmal guys. If we take a look right here, look at this.

[00:00:17]Roblox stock is down nearly 20% after hours. This was a very bad earnings. So in this video I'll be talking about the earnings. Look now, we're down 21% on the stock. It keeps falling. So with the case of this, we're going to be taking a look at this earnings report, telling you guys why this was a pretty bad earnings, especially compared to what they're expected to report. Then I'll be going into the intrinsic value calculations for Roblox, see if we should be buying the stock today. With that in mind, let's go ahead and take a look at this company. So let's take a look right here at the results.

[00:00:52]For the first quarter 2026, if we just take a look at the numbers, this looks pretty good. 1.4 billion dollars in revenue, that's good. 39% year-over-year growth is very good. The bookings 1.7 billion, this is 43% year-over-year growth, also very good. Average daily active users 132 million, very good.

[00:01:12]Everything's growing very good, but the problem here isn't that the growth isn't good, it's compared to what analysts were expecting.

[00:01:20]If we take a look at what analysts were expecting guys, take a look here. I pulled this up with Gemini just to take a look on the side. This is what analysts were expecting guys.

[00:01:29]Expecting 1.75 to 1.77 billion dollars.

[00:01:34]They're expecting 40 45% growth. We got 39% growth. This is a terrible miss. The EPS also was expected to be a loss of 41 cents, which makes sense. If we take a look at the consolidated loss, this was also pretty bad.

[00:01:50]Let's just say this earnings was not good at all. The consolidated net loss 248 million. Free cash flow though is positive, which is interesting here. Um this is growing very well. If we scroll down, look at this. Daily active users are definitely slowing year-over-year growth and look at this. Compared to third quarter 2025, it's decreasing at a pretty fast rate, which is definitely not looking good for this company. The daily active users regions also not good. Hours engaged not good. You do not want to see this going down. We obviously want to see this trending upward. Year-over-year, yes, we're growing in terms of hours engaged and the daily active users, but quarter-over-quarter we continue to decrease, which is not good. The revenue is starting to get pretty stagnant over the past few quarters. It's not looking very good for this company. The bookings have decreased.

[00:02:44]It's just not looking good in terms of this company Roblox right now. And if you don't know what Roblox does, basically Roblox is just a video game where they have a bunch of different games on that basically platform, I guess you could say. It's not just a video game. They have a lot of different ways and people can create their own games to play. So it's definitely a little bit different than just a video game maker. Taking a look at the balance sheet, this looks okay. The free cash flow though is what I do like. Look at this free cash flow growing over time.

[00:03:15]This is actually good from the company going forward and I actually really like this for Roblox. Shares outstanding though, if we take a look at the shares outstanding guys, let's scroll in here.

[00:03:26]Look at the shares outstanding. We're growing the shares outstanding pretty fast. So I don't love that about Roblox right here. Normally I like to see buybacks, especially normally from a more mature company, but at least this company Roblox is not that mature.

[00:03:43]So it might not be too bad, but let's get to the guidance here.

[00:03:47]Look at this guidance.

[00:03:49]The guidance also did not come in good at all. The guidance we have revenue for quarter two 2026, 1.39 billion to 1.45 billion dollars.

[00:03:59]If we go over to forecaster guys, let's take a look at forecaster compared to the past few reports.

[00:04:06]So let's go to the quarterly.

[00:04:08]So we continue to grow, right? But look at this. 1.44 billion.

[00:04:13]If we go back to this, look at what we're expecting.

[00:04:18]Look at this.

[00:04:19]Revenue 1.39 to 1.45 billion, right?

[00:04:24]That's expected to decrease quarter-over-quarter. So this can be one of their first decreases quarter-over-quarter in a long time.

[00:04:31]That's obviously not good for the company going forward, so that's something to keep in mind.

[00:04:36]Also the bookings is expected to go down. This is just not good for this company going forward. If we compare the year-over-year growth rates, the revenue still expected to grow 30% though. So that's not too bad the growth. It's just we are really revaluing where the stock is going to be. And if we take a look at the full year 2026 guidance, revenue 5.86 billion to 6.13 billion. Only 20 to 25% revenue growth now. So we're expecting pretty big deceleration in terms of their growth rates. That's not good. Also if we take a look at the consolidated net losses, we're expected to lose a lot of money guys.

[00:05:15]Expected to lose a billion dollars. If we take a look at forecaster once again and we go over to the net income, look at this net income.

[00:05:24]Let's take a look at the annual.

[00:05:26]We're expected to continue to just be burning money from this company at 1 billion dollars. So this earnings was pretty bad personally.

[00:05:34]This does not look good going forward for this This guidance just is not good at all.

[00:05:42]Nothing was good from this report honestly. I don't really see anything that was good from this report and that's why the stock is falling. So if we take a look at Let's see what the stock is doing right now again. We take a look at the stock guys, we are down still 20%. So with that being said, let's go over to valuation investing website and let's go ahead and analyze Roblox stock using my website, see what we should be paying for the company. So if we take a look at Roblox guys, look at right here, market cap of 39 billion. The PE ratios are non-applicable. This company doesn't make money, which I don't personally like. Um so that's definitely a fear. If we continue to just keep burning money, we have to become profitable soon and normally I like investing in profitable companies, but if you are an investor that is willing to take risks on non-profitable companies, you need this company to start to make money, especially with the market cap at 40 billion dollars. This is a very expensive stock. The one good thing though is the free cash flow is 2. The yield is 2.57%.

[00:06:42]That's a decent valuation for Roblox and it's good that the free cash flow is positive and growing. So in terms of the free cash flow, that looks good, but the net income doesn't. If we take a look at the net cash, this is also pretty darn good. 1.26 billion dollars in net cash is good for this company. Some Step Stock Analysis though, however, is not that good. Three out of the seven key metrics, shares outstanding increasing every year, they're diluting shareholders. EPS growth is not there because negative return on invested capital negative because they're not making money. If we do the intrinsic value calculator, we have to do some assumptions for the revenue growth, future profit margin, PE ratio and shares outstanding. For the revenue growth, if we take a look at what analysts are expecting guys, they're expecting 25% growth, but I think it's going to be a lot less than this. Especially with this recent earnings. As we saw, they're expecting maybe 30% growth.

[00:07:34]Previously analysts thought it was going to grow 72%.

[00:07:38]For the bearish case, I'm honestly going to go So if they're expecting 30%, let's just do 15, 25 and 35, I think. Let's do that. Um that's even aggressive actually. Let's just do 15, 20 and 25.

[00:07:53]I'm going to be a little bit more conservative. For the future profit margin, this is where it gets really hard. If we take a look at what analysts expect, for the net income, we're expected to get up to a billion dollars in net income, where it would be 15 billion in revenue. So that is a pretty decent profit margin. It's not great.

[00:08:11]That would be a profit margin of 7, 10%. It This is where it gets really hard to assume, but for the case of the net income in this intrinsic value calculator, we do have to technically assume that they're going to make a profit because if we don't, we're going to show negative numbers for what the intrinsic value calculation is. So say we just assume 5, 10, 15% profit margin for uh Roblox. Future PE ratio, for a company growing 15%, we could do 30, then 40 Let's do 30, 40 and 50 and then the shares outstanding, say they still increase at these rates because they're still going to continue to grow. If I press calculate here, guys, this doesn't look good at all, especially with what I believe pretty aggressive numbers. If they do get to this 10% profit margin, I think that would be pretty insane in the next 5 years.

[00:09:01]Personally, this doesn't look good to me. Roblox The This earnings was not good. The company is just an interesting company that I'm not personally interested in and the numbers speak for themselves with what I believe still pretty aggressive numbers. We're getting negative returns on the base case. So thank you guys for watching this video.

[00:09:18]Please subscribe, hit the like button, comment down below because I'm one of the fastest out there creating these videos after their earnings. So please check that check out the notification button, hit it and thank you guys and see you.