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On Thursday, BTIG analyst Clark Lampen reaffirmed a Buy rating and a $73.00 price target for Roblox Corp . (NYSE:RBLX), a gaming platform now valued at over $45 billion, following the company’s first-quarter results that surpassed expectations. According to InvestingPro data, the stock has delivered an impressive 83% return over the past year, though current analysis suggests it may be slightly overvalued at these levels. Roblox’s financial performance, which included Bookings, EBITDA, and Free Cash Flow (FCF) figures of $1.207 billion, $205 million, and $427 million, respectively, outperformed BTIG’s estimates of $1.178 billion, $177 million, and $376 million.
The positive results were attributed to a combination of factors such as an increase in Daily Active Users (DAUs), better monetization rates, more effective cost management, slightly reduced operating expenses, and higher operating cash flow conversion. These elements not only pushed the results beyond BTIG’s and the buy-side’s forecasts but also produced incremental margins that were approximately 1000 basis points above BTIG’s model. InvestingPro data shows strong revenue growth of 28.7% in the last twelve months, though the company remains unprofitable with a negative EBITDA of $819 million.
Lampen highlighted that the details behind the headline numbers were even more promising. Growth in North American DAUs and a higher Bookings per DAU countered the negative assumptions about market penetration. The analyst also pointed out the benefits stemming from increased engagement and a demographic shift towards older users who have a higher spending capacity.
Looking ahead, BTIG’s early analysis of second-quarter trends for 2025 indicates potential upside in DAUs and monetization, which could lead to adjustments in full-year estimates and guidance to more accurately reflect the current momentum. Despite facing tough comparisons, BTIG sees potential for estimates for the year 2025 to be revised upwards.
BTIG’s outlook for Roblox remains positive, with the expectation that the company will continue to be a preferred investment in a challenging macroeconomic environment. The analyst believes that Roblox’s significant, yet largely untapped opportunities in advertising and passive monetization could sustain a growth rate of over 20% in Bookings into 2026 and beyond. This potential growth is not yet fully reflected in the current stock price, according to BTIG. InvestingPro reveals that 4 analysts have recently revised their earnings estimates upward, with the stock currently trading near its 52-week high of $75.74. For deeper insights into Roblox’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Roblox Corporation reported impressive financial results for the first quarter of 2025, surpassing revenue forecasts with a reported $1.21 billion, exceeding the anticipated $1.14 billion. The company’s earnings per share (EPS) of -$0.32 also beat the forecasted -$0.40, indicating improved financial management. Furthermore, bookings increased by 31% year-over-year, reaching $1.21 billion, highlighting strong demand for Roblox’s offerings. The company demonstrated robust cash flow, with cash from operations rising 86% year-over-year to $443 million and free cash flow up 123% to $426 million. Analyst Mike Hickey from Benchmark raised the price target for Roblox to $77, maintaining a Buy rating, citing the company’s strategic initiatives and growth prospects. Roblox’s focus on AI innovations and expanding its developer ecosystem has been noted as a key factor in its positive trajectory. Additionally, the company has updated its full-year bookings and Adjusted EBITDA guidance, positioning the new midpoints slightly above current Street forecasts. These developments reflect confidence in Roblox’s growth and strategic direction.
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