Roblox (RBLX -6.88%) a Unity system (U -8.60%) They both saw their fortunes go up all the time last November when the bulls went to the “metaverse” games. However, investors who are pursuing such collections have been fired because of rising interest rates that have broken the market’s growing prices.
As of this writing, Roblox and Unity’s prices have declined by about 75% and 80%, respectively, from their highest levels. Would investors consider selling falling metaverse prices as a search game in this difficult market?
What happened to Roblox?
The Roblox platform allows you to use simple games without any coding knowledge. Developers can share their game with other users, and then spend money on them with in -game content and features. Those purchases are spent with some money in a game called Robux.
Roblox’s ease of use has been popular among users, and its popularity has increased during illness with more and more students staying at home. But according to the growing history of the disease, Roblox’s growth has slowed against the harsh comparisons of the year before the end of the hard work.
Roblox’s revenue will increase 82% to $ 924 million in 2020 and then increase 109% to $ 1.9 billion in 2021. its direct acquisition of Robux – increased 171% to $ 1.9 billion in 2020, but grew only 45% to $ 2.7 billion in 2021.
That delay was reflected in the lockout among its other metrics: Its number of daily users (DAUs) increased 85% to 32.6 million by 2020 but only increased to 40 percent. % to 45.5 million in 2021. % to $ 57.77 in 2020 but has only improved 4 % to $ 59.85 in 2021.
In the first quarter of 2022, Roblox’s revenue increased 39% annually to $ 537 million, but its books declined 3% to $ 631 million. His DAU rose 28% to 54.1 million, but his ABPDAU fell 25% to $ 11.67 because it had less money. His books and ABPDAU resumed through April, and analysts expect his books to grow by only 4% for the full year.
Roblox is growing cool, but it is always swimming in red ink. Its losses increased from $ 253 million in 2020 to $ 492 million in 2021 and then increased annually from $ 134 million to $ 160 million in the first quarter of 2022.
Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also fell 64% year -over -year to $ 68 million in the first quarter, and analysts expect estimates that the metric will decrease to 43% for the full year.
What happened to Unity?
Unity’s gaming engine is used to make more than half of all mobile, console, and PC games. Its Create platform also integrates a variety of tools for images, audio, and other assets, while its Operate platform provides integrated advertising, reviews, and payment services.
Unity also provides tools for virtual-reality, augmented-reality, and non-gaming applications. His re -acquisition is Weta Digital, which has created special effects for films such as Lord of the Rings and similar TV shows Games of Thronesincreasing its reach in the filmmaking market.
Unity first attracted investors with its huge growth. Its revenue increased by 43% to $ 772 million in 2020 and then grew by 44% to $ 1.1 billion in 2021. Investors have repeatedly been told that it could increase its annual revenue by more than 30% over time. long. Its annual revenue rose 36% to more than $ 320 million in the first quarter of 2022.
Unfortunately, Unity released a cat on its publishers during its first quarter report. He admitted that his maker Audience Pinpointer, which uses machine learning algorithms to generate the intended advertisements, included a lot of “bad data,” which made it impossible to convert any. advertisements. He needs to rebuild that algorithm, and that complicated setup will bring in about $ 110 million from his full years.
As a result, Unity expects its revenue to grow by only 22% -28%, which falls short of the consensus forecast (at the moment) of 31% growth. Unity said it will continue to have long -term growth goals, but the coming quarters could be difficult when it comes to addressing software issues.
Unity’s losses increased from $ 282 million in 2021 to $ 533 million in 2021, in part due to its acquisition of Weta, and increased annually from $ 107 to $ 178 million in the first quarter of 2022. -GAAP ), its losses decreased slightly, from $ 66 million in 2020 to $ 62 million in 2021, and then reduced annually from $ 27 million to $ 25 million in the first quarter.
Analysts expect Unity to remain unsatisfactory on the GAAP basis for years to come, but the industry expects to have non-GAAP revenue by 2023.
Evaluations and decision making
Roblox sold six times its expected books this year, while Unity sold seven times its expected revenue for the year. Those low temperatures may limit their ability to offset this difficult market, but both industries lack close catalysts.
I’m not in a hurry to buy any of these stocks right now. But if I had to choose one over the other, I would choose Unity because it will accelerate its growth after it heals his wounds that plagued him. Roblox has a better future because it has not proven to be able to drive continued growth in a post-lockdown market.