10:48 AM EDT, 10/09/2024 (MT Newswires) -- Roblox's ( RBLX ) prospects for increasing bookings at a double-digit rate is "far more important" to investors than user and engagement metrics, which were highlighted by short-seller Hindenburg Research, Wedbush Securities said Wednesday in a report.

In its report issued Tuesday, Hindenburg alleged that the video game platform might be inflating the metrics and doesn't have proper safeguards to protect children from predators.

"We believe that the Hindenburg report is based on faulty reasoning and draws distinctions that make no difference to Roblox ( RBLX ) shareholders," and the short seller dismissed the fact that the company's bookings keep increasing, Wedbush said.

"Bookings growth is a function of user and engagement growth, and Roblox ( RBLX ) grew its bookings figure 23% YoY last year and has seen 20%+ growth YoY in the first half of this year," Wedbush said. "We continue to believe Roblox ( RBLX ) can easily grow bookings at 15%+ per year and expect it to capitalize off its large advertising opportunity."

With predatory behavior a threat on all major social media platforms. "Roblox ( RBLX ) spends 25% of bookings attempting to prevent bad behavior, with trust and safety as paramount to the platform's success," and the company is "effectively combating bad behavior," Wedbush said.

Roblox ( RBLX ) shares rose 2.3% in recent Wednesday trading. They closed down 2.1% on Tuesday, paring early losses.

Price: 41.45, Change: +0.94, Percent Change: +2.32