The Roblox (NYSE: RBLX) stock price crashed by more than 15% on Tuesday after the company’s fourth-quarter results. The shares dropped to a low of $62, meaning that they have declined by more than 55% from their all-time high.
Roblox earnings review
Roblox is a popular company in the gaming and metaverse industries. The company operates a platform that enables people to play thousands of games.
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It went public in April last year and became more popular as the world started embracing the concept of the metaverse. This is an industry where people will interact with each other and shop in a virtual universe.
Roblox published its highly-anticipated quarterly results that missed what analysts were expecting. Its revenue rose by 83% in the fourth quarter to $568 million while its net cash provided by operating activities rose to $122 million. Its free cash flow was more than $77 million.
User metrics were equally good. The company recorded daily active users of over 49.5 million, which was 33% above where it was in 2020. The number of hours engaged in the platform also rose to 10.8 billion.
While these numbers were strong, the Roblox stock price crashed simply because expectations were significantly high.
Some analysts believe that the Roblox share price is now entering a value zone after the crash. Besides, this is a company with strong numbers and one whose share price has declined by more than55% from their all-time high.
Indeed, data compiled by WeBull shows that most analysts are still optimistic about the stock. The average estimate is that the shares will jump to $106, which is significantly higher than the implied open at $62. The most optimistic analyst expects that the shares will rise to $136 while the least optimistic believe that the stock will climb to $70.
Roblox stock price forecast
The daily chart reveals that the RBLX stock price has been in a bullish trend in the past few days as investors bought the dips. The shares are now expected to erase some of those gains and open at about $62.
The stock remains solidly below the 25-day and 50-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has continued to drop. Therefore, there is a likelihood that the Roblox stock price will keep falling as bears target the key support at $55.
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