Analyst Warns Roblox to Issue Weak Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy NVDA?
Source: Yahoo Finance
- Guidance Downgrade: Wells Fargo analyst Ken Gawrelski predicts that Roblox will issue weaker-than-expected guidance in its Q2 report, forecasting bookings growth of only 23% to 25%, below the analyst consensus of 30%, indicating growth challenges that could undermine investor confidence.
- Price Target Reduction: Gawrelski has lowered Roblox's stock price target from $97 to $78, marking the second reduction this year, which reflects a cautious outlook on the company's future performance and may lead to further selling pressure in the market.
- Revenue vs. Expenses Imbalance: Despite Roblox's revenue growing 43% year-over-year to $1.4 billion and bookings soaring 63% to $2.2 billion last quarter, the company's profitability remains severely constrained due to high content creator payouts and operational costs, raising concerns about its long-term viability.
- Declining Investment Appeal: Analysts highlight that Roblox's business model lacks attractiveness, particularly due to its excessive reliance on stock-based compensation, which may lead to waning investor interest, suggesting that investors should carefully consider their investment in the company under current market conditions.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 196.510
Low
200.00
Averages
264.97
High
352.00
Current: 196.510
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Significant Market Potential: CEO Matt Kinsella stated that the space market is poised to be an 'enormous market opportunity' for quantum technology, highlighting the recent delivery of an upgraded quantum physics package to the International Space Station as a foundation for future commercial prospects.
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