Stock of the day: Roblox tumbles 20%, set for worst drop in 9 months

businessinsider.com
02-06
  • Roblox stock plunged as much as 20% on Thursday after it reported mixed fourth-quarter earnings.
  • The company reported a decline in daily active users, which sparked growth fears among investors.
  • Roblox's cleanup of bots and inactive accounts could be tied to the decline in daily active users, analysts said.

The move: Roblox stock plunged as much as 20.3% on Thursday.

The chart:

Why: The video game platform released mixed fourth-quarter earnings that included soft guidance for 2025.

Roblox said it expects 2025 bookings of $5.20 billion to $5.30 billion, with the midpoint of that range being below the average analyst estimate. Roblox also reported that daily active users, a key metric tracked by Wall Street, declined to 85.3 million in the quarter from 88.9 million in the prior quarter.

What it means: For a company that is not yet profitable, all Wall Street cares about is growth, and when that growth is decelerating rather than accelerating, investors can get scared pretty easily.

What the pros are saying: Analysts at Bloomberg Intelligence said that the miss in daily active users during the quarter is "likely tied to the cleanup of inactive customers and bots on its platform after short-selling firm Hindenburg's claims of inflated user growth and child-safety issued tied tot he company's platform."

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