TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<ul>
<li>Roblox initially fell 17% on earnings, but ended the week up 8%... why? Third party data is driving stock price action.</li>
<li>Reacceleration of DAUs, engagement, and bookings is beginning to play out...bullish ST.</li>
<li>LT EBITDA margins are anyone's guess right now, which makes the coming 9/9 Analyst Day an important catalyst to frame up the size and margin impact of TAM extensions.</li>
</ul>


Roblox initially fell 17% on earnings, but ended the week up 8%... why? Third party data is driving stock price action.
Reacceleration of DAUs, engagement, and bookings is beginning to play out...bullish ST.
LT EBITDA margins are anyone's guess right now, which makes the coming 9/9 Analyst Day an important catalyst to frame up the size and margin impact of TAM extensions.


<ul>
<li>Management expected growth to bottom in April, wbut ended up bottoming in March, beginning a reacceleration expected to last into Q3. But how much acceleration?</li>
<li>Usage and engagement still strong: DAUs of 54.1M grew 30% YoY, a touch below of consensus. Hours Engaged were up 22% YoY to 11.8B, inline ahead of consensus.</li>
<li>Spending on brand safety, engineers, and developer fees set to continue - unclear how much earnings leverage to expect near term...tough for this market environment.</li>
</ul>


Management expected growth to bottom in April, wbut ended up bottoming in March, beginning a reacceleration expected to last into Q3. But how much acceleration?
Usage and engagement still strong: DAUs of 54.1M grew 30% YoY, a touch below of consensus. Hours Engaged were up 22% YoY to 11.8B, inline ahead of consensus.
Spending on brand safety, engineers, and developer fees set to continue - unclear how much earnings leverage to expect near term...tough for this market environment.


Roblox 1Q22: Acceleration Coming, But How Much?

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Sony and LEGO’s investment in Epic comes shortly after the official release of Unreal Engine 5 which promises to significantly improve efficiency for game designers and visual effects artists. </li>
<li>We had predicted that Sony and Epic would continue to drift closer and would eventually dominate the metaverse and this does nothing to change that view.</li>
<li>We discuss below the impact on some popular metaverse plays which investors seem to fail to realise are only metaverse plays because they can be shorted.</li>
</ul>


Sony and LEGO’s investment in Epic comes shortly after the official release of Unreal Engine 5 which promises to significantly improve efficiency for game designers and visual effects artists. 
We had predicted that Sony and Epic would continue to drift closer and would eventually dominate the metaverse and this does nothing to change that view.
We discuss below the impact on some popular metaverse plays which investors seem to fail to realise are only metaverse plays because they can be shorted.


Research on International Stock Ideas, Value Punks

Value Punks

Research on International Stock Ideas

Value Punks’ mission is to deliver institutional-grade research on international stock ideas in a digestible, reader-friendly format.

At Value Punks, we blend our background in traditional value-investing with an openness to embrace a constantly and rapidly evolving investment and business landscape.

Institutional-Grade Research

<ul><li>Recent months have been quite exciting for the gaming industry.</li><li>We believe Roblox is one of the most unique and valuable assets in the gaming industry. Yet, we think the company is not yet well understood.</li><li>The vast improvements seen in the gaming engine, and the platform’s expanding international presence (~80% of Roblox’s users now comes from outside of the United States) are just some of the things highly worth noting.</li></ul>

Recent months have been quite exciting for the gaming industry.We believe Roblox is one of the most unique and valuable assets in the gaming industry. Yet, we think the company is not yet well understood.The vast improvements seen in the gaming engine, and the platform’s expanding international presence (~80% of Roblox’s users now comes from outside of the United States) are just some of the things highly worth noting.

<ul>
<li>Roblox was crushed on 4Q21 earnings, owing to a weak guidance for January due to tough Covid comps.</li>
<li>We think the selloff is overdone given the still strong user growth and the "of course" normalization that was due to occur after incredible growth for the past two years.</li>
<li>Once growth normalizes midyear, the platform narrative will resume as reaccelerating core growth and 2023 advertising growth comes into view. A likely double from here.</li>
</ul>


Roblox was crushed on 4Q21 earnings, owing to a weak guidance for January due to tough Covid comps.
We think the selloff is overdone given the still strong user growth and the "of course" normalization that was due to occur after incredible growth for the past two years.
Once growth normalizes midyear, the platform narrative will resume as reaccelerating core growth and 2023 advertising growth comes into view. A likely double from here.


Roblox 4Q21: Metaverse or Optical Illusion?

United States

Roblox Corporation provides entertainment products and services. The Company designs and develops a wide range of online games such as internet three-dimensional and tutorial games for kids, teens, and adults. Roblox serves customers worldwide.

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ROBLOX (RBLX US)

Roblox 2Q22: 15% or 35% EBITDA Margins?

Roblox had a largely bullish quarter, with monetization and engagement metrics starting to show promised acceleration. Key will be 9/9/22 analyst...

Aaron Gabin

Roblox 1Q22: Acceleration Coming, But How Much?

Better than feared quarter for Roblox, but already down 90% from the peak...not sure what wasn't priced in at this point. Reacceleration on the...

Aaron Gabin

Sony – An Epic Funding Round

Sony and LEGO’s investment in Epic comes shortly after the official release of Unreal Engine 5. We discuss below the impact on some popular...

Mio Kato

Deep Dive: Roblox (RBLX US)

Recent months have been quite exciting for the gaming industry. We believe Roblox is one of the most unique and valuable assets in the gaming...

Value Punks

Roblox 4Q21: Metaverse or Optical Illusion?

2-3% MoM billings growth in January was the (negative) headline, but continued strong DAU growth and Hours Engaged are proof that the underlying...

Aaron Gabin

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