Bryn Talkington Roblox Corporation RBLX-N BUY Feb 10, 2022

Their last quarter was the first good one in a while, and the CEO is good. Don't sell it.

RBLX is up 42% this year and will probably do well if rates pivot and the market turns back into a 'risk on' mode. It has about $500M net cash ($2.1B cash, $1.6B debt), and does have positive cash flow ($434M in the trailing 12 months, $369M in 2022). Sales are expected to show 50% growth this year and at least 15% in 2024 and 2025. It is still losing money but per share losses are expected to decline ($1.88 this year, then $1.32, $1.11). Insiders own 3.5% and have been minor net sellers in the past six months. We would, today, rate it a HOLD.
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RBLX is up 42% this year and will probably do well if rates pivot and the market turns back into a 'risk on' mode. It has about $500M net cash ($2.1B cash, $1.6B debt), and does have positive cash flow ($434M in the trailing 12 months, $369M in 2022). Sales are expected to show 50% growth this year and at least 15% in 2024 and 2025. It is still losing money but per share losses are expected to decline ($1.88 this year, then $1.32, $1.11). Insiders own 3.5% and have been minor net sellers in the past six months. We would, today, rate it a HOLD.
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Shares keeping going up and up, but can't recommend it now. The last quarter was pretty good.

Just issue strong guidance. Daily active users, revenues, hours engaged were all up sharply. Japan and India show strong growth. Using AI you can speak to other users in other languages. Positive earnings remain a year away, but she likes this company.

Was downgraded to sell today, but the $34 sell target is very off. The CEO continues to defy the naysayers. Are positioned between gaming and Mr. Beast, the NFL, NBA--an interesting eco-system where they build games that get interest today. Japan's business is growing well.

Daily active users is up 26% YOY. Excellent growth in users and AUM. Is up 29% this month, so careful chasing it.

Most customers are under 18. User growth is accelerating, up 25% YOY. They are big in the US, sort of in Europe, but are expanding in south-east Asia, namely Indonesia. They have commerce API integration in the early stage of advertising that they will put on their platform. They have 600 million monthly users. Are generating lots of cash, but also spending that. They have a net lost. A great business that's growing over 30% in revenues and bookings. Their expect their community to generate $1 billion in creator earnings this year.

It isn't just a gaming stock, but an infrastructure play to own eyeballs that leads to advertising. Loves it.

Wrote covered calls last week. He made over $6. He wrote another call this week, expiring next Friday, for $3.50. If Roblox hovers at the current price, he'll net a $10 profit. Likes this long term, but the lawsuits are a concern that he's watching.