Why Roblox Stock Plummeted by 8% Today

Key Points

• An analyst raised worries about growth in a certain area.

• He looked through a microscope at the company's bookings.

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Growth concerns raised by an analyst tracking Roblox (NYSE: RBLX) stock affected investor sentiment on Friday. With that tailwind, market players traded out of the online video game company to leave its shares with a more than 8% decline on the day. By contrast, the S&P 500 (SNPINDEX: ^GSPC) essentially traded sideways.

Analyst points to slowing bookings

That morning, M Science's Corey Barrett wrote a fairly pessimistic update on Roblox stock. According to reports, his new take was based on key operational and financial metrics for the company.

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He wrote that the growth of daily active users (DAUs, a crucial metric in both the social media and online gaming worlds) continues to be robust. However, the growth of Roblox's bookings -- chiefly, the monies it earns from selling its in-game currency, Robux -- has declined substantially from recent peaks in the U.S. This has also occurred, albeit to a lesser degree, in key markets in Europe.

Specifically, Barrett forecast, U.S. bookings growth probably landed in the low-30% range year over year in September. That figure sat in the mid-to-high-40% range in August, and in excess of 50% the previous month, according to the analyst.

The market is worried

Roblox is a hotly and enduringly popular game among very young people, a dynamic that should serve it well as those players grow and continue to burn some of their leisure time on the activity. Expectations are high for the rather expensive stock, and if the company can't at least maintain those growth rates, the market might punish it further.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roblox. The Motley Fool has a disclosure policy.