Keeping It Simple

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RBLX A gaming platform worth owning for the long haul

https://finance.yahoo.com/m/e8b1598f-0fdd-3e0d-908f-3e743f18577a/2-cathie-wood-stocks-i-plan.html


Roblox (NYSE: RBLX), the company that offers a 3D digital world where users can create and play games, is one of my daughters' favorite platforms. They love to collect and spend Robux, the company's virtual currency, which they often ask for as gifts. However, as an investor, I also appreciate the value proposition and growth potential of Roblox's business model.

In the last quarter, Roblox reported a remarkable 20% increase in average daily active users, a 20% rise in hours engaged, and a 38% surge in revenue year over year. These are impressive metrics that demonstrate that Roblox is not a passing fad, but a sustainable and innovative platform.

That being said, I do expect this gaming stock to be a fairly volatile growth vehicle. Roblox will have to continue to innovate to stay ahead of its competitors, and sometimes gaming platforms lose their appeal for extended periods for reasons beyond a company's control.

But I suspect Roblox will ultimately follow a similar trajectory as Nintendo. Despite its rocky history, Nintendo's stock has delivered a whopping 818% total return on capital for shareholders over the past 20 years. That's the power of a beloved gaming platform, especially one that grows with its user base.

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