Roblox's Investor Day Sparks Analyst Optimism: Highlight Projected Bookings Growth And Margin Expansion

Piper Sandler analyst Thomas Champion maintained Roblox Corp RBLX with an Overweight and raised the price target from $50 to $52.

The analyst remains impressed by the RBLX Investor Day, which featured a discussion around advertising, AI, model leverage, and ~20%+ bookings growth. Advertising will likely include a full-funnel suite of products by FY25 with revenue at higher incremental margins than the core business. As for financial targets, management spoke to ~20%+ bookings growth through FY25-FY27 and 1-3% annual margin expansion.

The analyst projects Q4 revenue of $758.1 million.

Oppenheimer analyst Martin Yang reiterated a Perform rating.

Roblox hosted its third annual Investor Day to highlight its latest features, vision, and business outlook. The primary focus of this year's Investor Day revolved around its advertising roadmap to onboard more brands and increase spend through additional advertising functionality and solutions. Furthermore, Roblox commented on its 2024 outlook and is "feeling comfortable" with consensus estimates. Management also guided booking growth at above 20% bookings from FY25-FY27. 

The analyst projects Q4 revenue of $1.1 billion.

Needham analyst Bernie McTernan reiterated a Buy rating with a price target of $51.

RBLX hosted its annual investor day, focusing on medium-term financial targets, advertising, product innovation, and AI. The medium-term projected CAGRs for bookings and margin expansion were below McTernan's expectations, but notes that the multi-year compounding RBLX expects is better than investor sentiment currently.

A projected bookings CAGR of 20% + 200bps of annual margin expansion makes the stock significantly cheaper the further investors are willing to look out, making the elevated current trading multiple more palatable.

Benchmark analyst Mike Hickey reiterated a Buy rating and a price target of $46.

At the Roblox investor event, the company presented a convincing growth strategy, showcasing the company's strong potential. The analyst is particularly enthusiastic about Roblox's prospects in establishing a robust advertising business, which has the potential to evolve into a billion-dollar venture over time.

The analyst notes that the guidance on revenue growth was particularly impressive, as was the company's focused approach to significantly boosting margins through sustained operational leverage from fixed expense containment. 

The analyst projects Q4 revenue of $1.06 billion.

Morgan Stanley analyst Matthew Cost reiterated an Equal-Weight with a price target of $30.

At the FY23 investor day, new long-term guidance surprised the upside on bookings and aligned with expectations for margin expansion. The analyst also got a clearer vision of the ads and shopping roadmap through FY25, which are the key product areas to monitor from here, along with RBLX's Al investments.

Citi analyst Jason B Bazinet reiterated a Buy rating and a price target of $51.

Roblox had its 2023 Investor Day today. The firm was comfortable with 2024 consensus estimates for net bookings and adjusted EBITDA. And it gave preliminary guidance for FY25-FY27. Management expects 20%+ Y/Y net bookings growth in FY25-FY27. And it believes margins can expand 100-300 basis points each year for the next 3-5 years. The analyst sees scope for consensus estimates to move up. 

Raymond James analyst Andrew Marok reiterated a Strong Buy rating and $47 price target.

Marok attended Roblox’s Investor Day in the San Francisco Bay Area on Wednesday. Medium-term financial guidance exceeded what investors needed to see entering the event. Company strategy remains consistent and focused despite a wide array of growth opportunities. Ads and Shopping are must-haves, not nice-to-have, to hit medium-term targets. Increasing usage of Generative AI tools in Studio can provide notable tailwinds for content development. 

Price Action: RBLX shares traded lower by 4.48% at $37.98 on the last check Thursday.