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Roblox stock tumbles on August metrics data

Yahoo Finance Live anchors discuss Roblox stock performance and how investors are reacting to the company's August metrics release.

Video Transcript

[AUDIO LOGO]

BRAD SMITH: Also here this morning, we're watching shares of Roblox, as the ticker symbol RBLX. You're seeing that move lower by about 9 and 1/2% right now. And this is after the company, they announced some August metrics, seeing a big decrease in the estimated average bookings per daily active user. We're gonna come up with an acronym for that at some point. Down between 14% and 16% year-over-year.

We should also note here that more broadly, even as they're looking across hours engaged, they were about 4.7 billion. Sure, the hours engaged up 18% year-over-year. The daily active users, 59.9 million. That's up 24% year-over-year. But it does come at a time where more broadly in the course of 2022, there is this contraction that's been estimated and been expected within the broader video game space.

And that's something that is set to-- or perhaps will impact Roblox more broadly. And you've got to figure out some of the other names, gaming segment. Roblox, Take-Two Interactive, of course, Activision and the different deals that they have with Microsoft as well. Once that finally goes through for all of these names, that's set to have a much larger implication for where they're actually going to see and find some footing within the video game segment.

BRIAN SOZZI: Yeah, and besides the August metrics for Roblox, they had to hold a key investor day this week. I'm looking at a good note from Jefferies over there. Noting that, during the presentation, CFO of Roblox Mike Guthrie, he made it clear that capital allocation decisions are made with the 10-times opportunity in mind. What does that even mean? What? 10-times opportune-- what does that even mean?

BRAD SMITH: 10 times TAM.

BRIAN SOZZI: 10 times-- come on.

JULIE HYMAN: Well, it means-- they mean-- well, it means--

BRIAN SOZZI: I know what it means. It's just--

JULIE HYMAN: You know.

BRIAN SOZZI: --jargon.

JULIE HYMAN: I know, it is jargon. Well, apparently, they gave a billion monthly active user goal, which is four-times higher than we are right now. And just like in everything else, you know, Netflix included now, they're talking about the ad opportunity within Roblox. Although, I guess it's more organic when it's like built into the game.

BRIAN SOZZI: I'm gonna eat the 10-times Taco Bell this-- tonight, as I did last week.

JULIE HYMAN: Please don't.

BRIAN SOZZI: I'm gonna eat 10 times of it. I'm gonna eat 10 times of it. I'm all in.

BRAD SMITH: We've seen your Chipotle order.

BRIAN SOZZI: I'm gonna do 10 times my workout over the weekend as a result, too. I'm gonna 10-times everything. 10 times coffee. I'm gonna 10 times everything.

JULIE HYMAN: I'm anti-10 times--

BRIAN SOZZI: All right.

JULIE HYMAN: --any of that stuff.

BRIAN SOZZI: Too much?

JULIE HYMAN: Too much.

BRIAN SOZZI: All right.