![]() Before starting to trade, please contact your broker or a financial advisor to check the quotes, evaluate forecasts or the opinion of the author of the article. The information is not intended for trading or advice of financial, investment, tax, legal, accounting or any kind of nature. BNB Price Prediction Today (Binance Coin)Īll information on this page is published ‘as is’ and for information purposes alone. Mark Hake writes about personal finance on and runs the Total Yield Value Guide which you can review here. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. Hake did not hold a position in any security mentioned in the article. This means that, although RBLX stock is probably fully valued right now, investors can likely expect to see the stock rise at least 100% to $201 over the next year. That more or less guarantees that the company’s high FCF growth and margins will continue. It implies that the annual growth rate in DAUs is still very high at 65.4% on a compounding quarterly basis. That means that quarter over quarter the number of users grew 13.4%. In addition, there were just 37.125 million DAU’s at the end of Q4. ![]() This was up 79% year over year and well over the guidance of 39.6 million users. Last quarter it had 42.1 million daily active users (DAUs). Moreover, the number of users is still growing. This is obviously highly dependent on the growth rate in sales.īut kids are still spending a lot of time on the Roblox gaming platform. So, even though RBLX stock is probably at full value for right now, if sales and FCF keep at the same pace the stock will likely double over the next year. This also means by next year RBLX stock could be trading at $201 per share. ![]() That represents a potential gain of 101% (i.e., $111.74 billion / $55.43 billion). This implies that over the next year, assuming the stock rises to a 1% yield, Roblox could end up with a $111.74 billion market cap. Therefore the FCF yield is only 2.0% (i.e., $1.117 billion / $55.43 billion). This is over twice as high as the $568 million in run-rate FCF production estimate. Therefore, using a 37% estimated FCF margin, FCF will reach $1.1174 billion. For example, analysts now estimate that in 2022 sales will rise by 20% from $2.51 billion in 2021 to $3.02 billion. However, let’s take another look at its valuation using the FCF margin concept. That is one reason why I feel that RBLX is probably close to a full valuation. The fact is a 1% FCF yield is a very high metric. This is seen by dividing $568 million by $55.43 billion. Since RBLX stock has a market value of $55.43 billion, this means that it has a FCF yield of 1%. For example, if Roblox keeps generating $142 million in FCF over the next four quarters, it will have an annual FCF production of $568 million. One way to estimate its value is to use the run rate FCF and divide this by the market cap. Moreover, it would be normal for the Christmas season to have a higher FCF margin.īut more important than anything, we can now reliably use the $142 million FCF and the 37% average FCF margin to estimate the value of RBLX stock. However, even though Roblox’s FCF margin fell from 38% in Q4 to 36.7% in Q1, the fact is these are very high levels. In fact, last quarter its FCF was just $127.4 million, so the FCF grew by 11.5% quarter over quarter. It essentially means that the gaming company is extremely profitable and is a cash cow. This is a very high margin and many companies, including typically profitable software companies, would love to have this high a FCF margin. That represents 36.7% of its total revenue. But more importantly, Roblox produced $142.1 million in FCF during Q1. For example, sales were up 140% to $387 million, and 15.4% higher than the prior quarter’s $335.2 million.
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