Replies to post #12119 on Keeping It Simple

[eastunder]

Roblox Stock Risks Running Into Valuation Roadblock

https://investorplace.com/2021/03/rblx-stock-valuation-roadblock/

RBLX stock is compelling but also very pricey, just weeks after its debut

By Josh Enomoto, InvestorPlace Contributor Mar 24, 2021, 5:31 am EDT

Ask any corporate executive and likely all of them will state that they wish the novel coronavirus pandemic never happened. Sure, some companies benefited from the crisis but long-term sustainability has always been a question about this cynical tailwind. Nevertheless, if there was a Covid-19 winner, it might be Roblox (NYSE:RBLX). A distinct take on the video game industry, RBLX stock recently listed to much fanfare.

Fundamentally, what’s exciting about Roblox is the underlying industry. According to Nielsen , “55% of people picked up video games — out of boredom, to escape the real world, to socialize — during the first phase of lockdowns.” If there’s any surprise to this statistic, it’s that the metric isn’t higher. With in-person entertainment options axed and the temporary cancellation of live events, this dynamic boosted the narrative of RBLX stock and related investments.

You only need to look at the trailing-year performance of top video game stocks to understand the impact that the crisis had on the sector. Electronic Arts (NASDAQ:EA) is up 38%, while Activision Blizzard (NASDAQ:ATVI) is up 63%. And the one that I’m happiest about, because I own shares, Sony (NYSE:SNE) soared 102%.

But the problem with consumers is that they’re fickle. Admittedly, the pandemic might change this outlook somewhat. Still, human nature is what it is — and that means people are going to look for new experiences.

That’s perhaps the biggest calling card for RBLX stock. Roblox is distinct, perhaps unique among video game investments in that it’s a modular platform rather than a fixed system. It allows developers to make their own games and share them with others. In that way, the possibilities are limitless.

Better yet, Roblox is family friendly. You’re not going to find any offensive gaming content nor does Roblox allow offensive speech. It appears perfect for the target teens-and-tweens market but that’s also part of the problem.

Consider Headwinds Before Buying RBLX Stock

Our own Matt McCall knows technology. So I wasn’t shocked when he stated that RBLX stock was underlined by cutting-edge innovations. Primarily, it’s what I discussed above — the free-to-play app allows anyone to craft their own experiences and to share those with gamers around the world.

Further, McCall points out that top-line sales jumped in 2020 by 82% against the prior year to $923 million. Therefore, it’s understandable why many investors have been enthralled by RBLX stock. Even so, he’s suggesting that the valuation is frothy and that you should wait for a better price.

I don’t necessarily disagree with his view. First, RBLX stock went public via a direct listing. This has advantages over a traditional initial public offering because it avoids the usual pre-debut process. Further, a direct listing doesn’t require the services of an underwriter. Therefore, it’s cheaper for the company going public.

But the drawback is that demand for a direct listing depends entirely on free market forces. That is, no new shares are created, so tradable shares can only be derived from an existing pool. And this implies that you don’t see the hype train associated with traditional IPOs to gin up interest.

Well, if McCall is saying to let RBLX stock cool off, this is “real” demand he’s referring to. That makes me concerned that Roblox’s valuation is indeed frothy.

Second, the company’s family-friendly platform may become a roadblock down the line. Sure, on paper, it sounds great that Roblox is teen-and-tween friendly. But let’s be real — if you think teens are going to stay permanently on family friend content, you’re delusional.

“Oh, but my Bobby will never play those kinds of games,” I hear some of you say. Believe me, he already is and probably worse.

The Best Approach to Roblox

If you’re having a case of the FOMO (fear of missing out), you may want to place a modest bet on RBLX stock now. Longer term, I like the idea of a more-interactive and productive video game platform rather than participating in static content.

At the same time, I think McCall is right. The valuation is frothy, especially in light of the long-term track record of gritty, realistic gaming content. Overall, it’s a great concept but RBLX just needs some time to settle down to a more reasonable range.

[eastunder]

Here Are The Winners of Metaverse Buzz
Thyagaraju Adinarayan and Jeran Wittenstein
Wed, November 17, 2021, 7:35 AM·3 min read

https://finance.yahoo.com/news/winners-metaverse-buzz-122921019.html

Here Are The Winners of Metaverse Buzz
In this article:

RBLX
+7.33%


NVDA
-1.36%


FB
-0.05%

(Bloomberg) -- The buzz around the metaverse is taking the technology sector by storm.


Chipmaker Nvidia Corp. and gaming company Roblox Corp. are just two of the stocks to have surged since Facebook co-founder Mark Zuckerberg renamed his company to highlight a shift in focus to virtual reality.

In that brief three-week period, dozens of tech stocks have added hundreds of billions dollars in market capitalization. Between Nvidia, Roblox and the re-christened Meta Platforms Inc., that equates to a combined $230 billion. Nvidia has gained 18% in November and Roblox is up 39%.

Metaverse -- digital worlds where users can socialize, play games and conduct business -- is a multi-trillion dollar opportunity, according to Epic Games Inc. Chief Executive Officer Tim Sweeney. Still, mass market adoption of virtual reality and augmented reality technologies will only occur when Apple Inc. joins the party, Morgan Stanley analysts have said.

“The Metaverse is real -- but is emerging,” said Neil Campling, an analyst at Mirabaud Securities. “Some of most likely beneficiaries of metaverse gaming should be the platform companies and those with scale,” Campling said, citing the likes of Tencent Holdings Ltd. and Microsoft Corp.

Morgan Stanley sees Meta Platforms and Roblox as among the winners in a space that will likely take years to become mainstream, but for which the buzz is already loud and clear: Mentions of metaverse during third-quarter earnings calls surged for companies on the Bloomberg World Large & Mid Cap Price Return Index, with the word popping up three times more than in the previous quarter.

The rush to the space is evident. The Roundhill Ball Metaverse ETF, an exchanged traded fund focused on the theme, said it surpassed $500 million in assets under management, doubling in just two weeks. Holdings under the ETF include Nvidia, Roblox, Amazon.com Inc. and Qualcomm Inc.

It’s not just a tech phenomenon. There’s a lot of chatter about styling digital avatars in social gaming with famous luxury brands. Indeed, a digital version of Gucci’s Dionysus bag sold on Roblox’s platform for about $4,115, well above the price of the physical item.

Though the metaverse’s full market potential is years away, it’s already been a boon for some companies in the future ecosystem. Arista Networks Inc. and Seagate Technology Holdings Plc are among stocks that have soared this month amid optimism that the likes of Meta Platforms and Amazon will continue to spend on data center gear. Arista Networks has gained 28% in November and Seagate is up 16%.

“Whatever the future looks like, it’s going to require accelerated computing,” said Jason Benowitz, senior portfolio manager with Roosevelt Investment Group. “We keep thinking of new and better ways to utilize data and we wind up with tremendous growth in data transmission, which drives that cohort of companies whether or not the metaverse comes to reality.”

[eastunder]

RBLX

LT build

NTS: for adding locations

Open Gap 79.02 11/9/21

50d 85.70

[eastunder]

Would Meta Platforms Buy Roblox?
And some thoughts on Cyber Monday and the omicron variant.

As Meta Platforms (NASDAQ:FB) (formerly Facebook) continues to invest in the metaverse, would acquiring Roblox (NYSE:RBLX) fit with its plans? Motley Fool analyst Asit Sharma tackles that question and weighs in on the results from Cyber Monday and the stock market uncertainty caused by the omicron variant.

https://www.fool.com/investing/2021/12/06/would-meta-platforms-buy-roblox/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


(NTS: Transcript From a Dec 1st podcast, as noted in their final paragraph??)

(Use link for full article but RBLX portion copy and pasted below....)

Hill: Our email address is [e-mail]. Got a question from Bill Nielsen, who asked, "Is there a chance that Mark Zuckerberg would buy Roblox since it is one of the major players in the current level of metaverse? Roblox already has a lot of numbers and continues to add. It would provide an early place to reach people who are already involved with the concept and bringing them into his advanced level." There are a few places I want to go with this, but let's just start with the question as Bill laid it out there. Roblox is at the moment a $71 billion company. This would be a not-insignificant acquisition if, and I have to remind myself that it's the name of the company is now Meta Platforms. If Meta Platforms, formerly Facebook, were to make an acquisition of Roblox, it's a decent chance it's not going to be 71 billion, it's going to be closer to a 100 billion. But is that something that Meta Platforms shareholders should be hoping for?

Sharma: It's an intriguing question from the listener. I just want to make a quick comment here to your point, Chris, this would have to involve some combination of cash, stock since Roblox already is so big. Of course, Meta Platforms aka Facebook is near a trillion bucks in market capitalization. They could certainly trade enough stock to make the deal happen. It is hard to figure out what is in Mark Zuckerberg's mind. He has invested in the hardware component of this space for many years. He is pouring tens of billions of dollars more into this investment, hiring thousands of engineers globally to push also into the nonhardware or software aspect of this space. Facebook has communicated that they don't want to create the metaverse, and be the owner of a single space. I think they're just trying to allay fears that many of us have, and also keep the people who are always looking to break up big tech at bay by saying that, I think if eventually Facebook did have a dominant platform, which was the biggest expression of the metaverse, they would be quite happy with that. In some ways, Roblox already represents where Facebook wants to go. I remember Facebook had a few clumsy tweets after Mark Zuckerberg's big Metaverse presentation, where they were adding different retailers. What is your space going to look like in the metaverse? Funny, Roblox already has this.

One of the biggest brands on the planet, Nike (NYSE:NKE) is teaming up with Roblox. Roblox is essentially a gaming site that young kids who are typically between the ages of 6 and 16 goes to play games, and build worlds. But it also has this really amazing experiential aspect to it. People can go, and basically create their avatars, and have meetings in this space, attend concerts, do all kinds of fun things. Roblox's already the expression, fun expression of the metaverse that Facebook, I think would like to see itself creating. This is why the listener's question is so intriguing. Why don't they just buy Roblox? We know that Meta Platforms when it was Facebook was not averse to taking some big bets. Mark Zuckerberg put billions into Instagram and WhatsApp, and at the time, those acquisitions look really bold, an outsized, they make a lot of sense now to the business model. It wouldn't be unusual for Facebook to pour capital here. I just question whether Facebook really wants to swap a smaller competitor when it's got such a seemingly specific idea of what it wants to do. It's already signaled this huge investment over the next several years. I wish I could give a better answer. My gut feeling is that Meta Platforms just isn't interested in Roblox right now because it wants to create its own version of the metaverse. But if I were an executive on that team, what I would look at that as the possibly really keen strategic acquisition. I would, but I'm not on their management team.

Hill: Is Roblox attractive enough as a business? Even keeping in mind that it's a $71 billion company, is it attractive enough that someone could look to buy them? Or do you think by virtue of its size, that it would be a very safe bet that they're not going to get acquired? Because I know there are a lot of people who really love that business. There are shareholders who love being shareholders. Look, sometimes when you're the shareholder and the company is a little smaller, part of you is thinking, this is a great business. I hope it doesn't get acquired. I want it to run on its own. I'm wondering if Roblox shareholders can breathe easy knowing that the bigger that company gets, the less likely it is that an Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) or a Microsoft (NASDAQ:MSFT) comes in, and says, "Here's a check with more zeros than you can possibly imagine, and we'll be taken the keys to the car."

Sharma: If you're an investor, you're hoping that the few big companies that could pull off an acquisition of Roblox are looking in other directions. This is a company however, that at least it's going to attract some attention by potential buyers who want to extend their footprint in the metaverse space. We should say that companies like Microsoft themselves are already creating their own expressions of the metaverse, which are now a little business-to-business centric. Same could be said for Nvidia (NASDAQ:NVDA), the chipmaker. But here you have a consumer expression. The metrics are very interesting. Chris, average daily active users in quarter three for Roblox were 47 million people. They had an amazing number of hours of engagement, 11.2 billion hours of engagement on this platform, which increased almost 30% year over year in the third quarter. The numbers are there. This platform is widespread, it's ubiquitous. It's got a bigger and more engaged user base than many people realize who haven't looked at the business since it came public. There is something here for a savvy investor that believes they can take a free-cash-flow-positive company with really wonderful customer metrics that is drawing, attracting interest to the metaverse space and then take it to the next level. But I see your point though for Roblox shareholders, you hope that no one's paying attention.

Hill: Reminder that tomorrow, Dec. 1, is when Meta Platforms changes its ticker symbol. If you're a shareholder, today's the last day, you're going to see the letters FB in your portfolio tomorrow, Dec. 1, it becomes MVRS, so don't freak out when that happens. [Editor's note: Meta Platforms pushed backed changing the company's ticker symbol to 2022.] Asit Sharma, great talking to you. Thanks for being here.

[eastunder]

RBLX
Open Gaps
Direction Date range
up Nov-09-2021 79.02 to 94.38
up Oct-13-2021 72 to 72.2

[eastunder]

In its recently-published Q3 investor letter, Jefferies Group mentioned Roblox Corporation (NYSE:RBLX). Here is what the investment management firm has to say:

“If we look at the Metaverse concept with more lenient guidelines for interoperability, then it becomes easier to see why certain companies are being referred to as Metaverse. On the virtual side, we’d point to companies like Epic Games, TakeTwo and Roblox. In augmented reality, it would be Niantic and SNAP. These are the large capitalized players in the space but albeit, not the only ones. We expect new mulit-billion dollar companies will rise as the Metaverse becomes more mature.

Roblox is a good example. The content is almost entirely user generated, the engine that powers the developer studio is provided by Roblox and developers/creators share in almost all the money that users spend on the platform. In addition, many of the items that you purchase in the avatar marketplace, or even a branded experience like Vans World, can be taken across experiences. Roblox talks a lot about platform extension, which would move the platform beyond just gaming/leisure experiences and into education and workplace offerings. The developer community has the capability to build tools for other developers, there are professional studios being built on the platform and many consumer-facing brands/content are partnering with Roblox to ensure a virtual presence. Roblox actually has a lot of the pieces for our utopian definition of Metaverse, but things like technology, interoperability with outside platforms and a dynamic, two-way economy are what’s missing. However, given our thesis that full interoperability is somewhat unrealistic, it’s easy to see how Roblox fits the definition…

Many already consider RBLX a Metaverse, or at least an early iteration of one, and here’s why. The platform offers all the tools required for content creation in a low-code / no code format and handles publication, language translations, billing, collections, safety and security of the environment and more. It’s hard to find a platform that makes the creative process easier for developers than Roblox; we see this as very supportive of creator economy.

The content is almost entirely user generated and developers/creators share in almost all the money that users spend on the platform. The developer community has the capability to build tools for other developers, there are professional studios being built on the platform and many consumer-facing brands/content are partnering with Roblox to ensure a virtual presence. Roblox talks a lot about platform extension, which would move the platform beyond just gaming/leisure experiences and into education and workplace offerings. Lastly, many of the items that you purchase in the avatar marketplace, or even a branded experience like Vans World, can be taken across experiences. In essence, the RBLX ecosystem includes creator economy, a virtual platform, picks and shovels of the Metaverse and some interoperability – many of the key enablers for Metaverse.

However, there’s always work to be done. We would expect to see a more dynamic economy emerge with resale moving beyond limited items and premium members, particularly with newer gaming models such as play-to-earn. Increasingly, gamers are going to want somereturn for the time and money invested on a platform. Advancements in technology will allow for truly shared experiences among a larger and larger group of people. We remain skeptical on the reality of interoperability; RBLX could very well end up being one of many Metaverses.”

[eastunder]

RBLX watch 79.02 area

(May move up tomorrow? It's been a bad day on many - but gap will still be in play until 103.87 is bridged.)

Open Gaps
Direction Date range
up Nov-09-2021 79.02 to 94.38
up Oct-13-2021 72 to 72.2
down Dec-15-2021 105.35 to 99.75

numbers to note:

200 day currently 86.07? - no reason for that to hold. Why? Mac hasn't turned. Death cross on the wee's (20 day and 50 day). Trading under the five. Zero insider buying, on the down and just selling during that rise. P/E of 476. LOL Seriously? That's a hoot. On a good note- 470 funds now. 8 q's ago that was at 197. Cool. 147m in sales to 509m in sales in just 8 q's. Also cool. Good growth. RBLX Just got ahead of itself.

NTS: Track gap fill number

RBLX is back in the range of its consolidation base with 103.87 on the top end and 69.77 on the bottom and that gap sits right in the middle

[eastunder]

Congrats RBLX! You just kicked your P/E down from 509 to 422 with that gap fill.

Thats horrible and yet....
oddly attractive.

[eastunder]

Is Roblox Stock A Buy Right Now After Reporting Key November Metrics?

https://www.investors.com/research/roblox-rblx-stock-buy-now/?src=A00220

SCOTT LEHTONEN09:44 AM ET 01/19/2022

San Mateo, Calif.-based Roblox (RBLX) is a popular video game platform that is considered a play on the emerging metaverse, a next-generation version of the internet. After soaring more than 40% in its latest quarterly earnings report, is Roblox stock a buy in the current stock market weakness?

RBLX Stock IPO

The Roblox stock initial public offering (IPO) via direct listing occurred on March 10 with a suggested price of 45 per share. With a direct listing, no new shares in the company are created and sold. Nor did the Roblox IPO raise any capital. Instead, current investors begin selling already existing shares based on demand when trading opens.

On March 10, Roblox stock closed at 69.50, more than 54% above the 45 IPO price. A huge price percentage increase on the IPO day indicates strong institutional backing.

The company's eponymous "Roblox" game is the biggest mobile game of 2020 in the U.S. in terms of revenue, according to Sensor Tower. It surpassed "Candy Crush," which had been the top game for the past three years.

Roblox reported having 32.6 million daily active users at the end of 2020, up 85% from the year-ago period. Revenue jumped 82% in the year to $924 million. It had a net loss of $253 million in 2020, vs. a $71 million loss in the prior year, according to the Roblox IPO filing.

What makes Roblox different from other online game platforms is that it lets users create their own games. Developers receive 30% of the proceeds generated from a game, such as the sale of virtual outfits and avatars.

On Nov. 9, Roblox reported strong third-quarter earnings results. The company reported bookings of $637.8 million in the September quarter, up 28% year over year. Average daily active users increased 31% from a year earlier to 47.3 million in the third quarter. That showed an acceleration in growth from the second quarter, when users rose 29% to 43.2 million. Time spent on the platform rose 28% year over year to 11.2 billion hours in the September quarter. In the second quarter, engaged hours grew 13% to 9.7 billion.

Roblox earned an adjusted 5 cents per share on revenue of $509.3 million. Sales jumped 102% year over year for the third quarter.

On Dec. 15, Roblox reported key metrics for November. The company said daily active users were 49.4 million, up 35% year over year. Estimated bookings for November were between $208 million and $211 million, up 22%-24% year over year. Estimated average bookings per daily active user was between $4.21 and $4.27, down 8%-9% year over year. The company sees November sales between $184 million and 187 million, up 84%-87% year over year. RBLX stock dived 9% in response.

Roblox Stock Is A Metaverse Investing Play

What is the metaverse? The metaverse is considered a next-generation version of the internet. Technologists describe the metaverse as a persistent, shared, 3D virtual environment. There, people meet for activities ranging from playing games to conducting business. It incorporates such technologies as virtual reality and augmented reality.

Mark Zuckerberg, now the chief executive of Facebook parent Meta Platforms (FB), describes the metaverse as "an embodied internet that you're inside of rather than just looking at."

"The metaverse is bigger than gaming," said Christina Wootton, Roblox vice president of brand partnerships. "We're ushering in this new category of human co-experience. It's an immersive place where people can come and connect with one another and have shared virtual experiences. They can do things together, such as work, learn, play, shop and experience entertainment."

Metaverse Stocks To Buy And Watch

Meta Platforms, Microsoft (MSFT) and Nvidia (NVDA) are among the top metaverse stocks to watch in the metaverse space.

Meta Platforms is back below its key 50-day moving average. The company has invested heavily in virtual reality and augmented reality as it builds Zuckerberg's vision of the metaverse.

Microsoft is planning metaverse apps for gaming, like possible transformations of "Halo", "Minecraft" and "Microsoft Flight Simulator" into full 3D worlds. The IBD Leaderboard stock is falling further below its 50-day line.

Nvidia is sharply below its 50-day line for the first time since an Oct. 25 breakout past a cup base's 230.53 buy point. On Nov. 9, Chief Executive Jensen Huang touted Nvidia Omniverse, a virtual world simulation and collaboration platform for 3D workflows.

Roblox Stock News

On Sept. 1, Roblox announced the launch of Vans World, an interactive Vans skateboarding world experience. Vans World is a metaverse playground where players can perform tricks and customize Vans gear and apparel, while hanging out with their friends.

On Nov. 18, Nike launched an immersive world experience — called Nikeland — on Roblox. Players will be able to enter a digital showroom to dress their avatar in Nike apparel and check out the company's latest products.

On Nov. 19, Roblox held a well-received analyst day event in which Roblox executives discussed the company's penetration of new markets such as education and music. The company also said it believes all consumer brands will need a Roblox strategy in the next three to five years.

Morgan Stanley analyst Brian Nowak reiterated his overweight rating on Roblox stock and raised his price target to 150 from 88.

RBLX Stock Price And Technical Analysis

Roblox stock surged more than 42% on Nov. 9, breaking out past a 103.97 buy point in a consolidation — according to IBD MarketSmith chart analysis. The catalyst was the company's strong earnings. Shares are trading about 35% off their 52-week high, and are sharply below their key 50-day moving average.

Bullishly, the stock's relative strength line surged to new highs in the wake of the stock's breakout move. But that technical indicator has fallen dramatically during the stock's sharp pullback. The RS line measures a stock's price performance vs. the broad market.

According to the IBD Stock Checkup, RBLX stock has a modest 49 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths.

On Wednesday, Roblox stock rallied nearly 3%, trading around 79.20 per share.

Is Roblox Stock A Buy Right Now?

Roblox stock is one of the top metaverse stocks to watch in the current stock market rally. The video game platform boasts huge sales growth in recent quarters amid the company's potential in the emerging metaverse investing theme.

Shares are now pulling back sharply during a the stock market weakness. Amid the current stock market volatility and Roblox's precipitous drop, the stock isn't a buy right now. Wait for the stock to form a new base, which would offer a new buy point.

[eastunder]

Roblox Stock Falls After Video Game Platform Misses Fourth-Quarter

https://www.investors.com/news/technology/roblox-stock-falls-as-video-game-platform-misses-targets/?src=A00220


PATRICK SEITZ05:01 PM ET 02/15/2022
Video game platform Roblox (RBLX) late Tuesday missed Wall Street's estimates for the fourth quarter. Roblox stock tumbled on the news.

The San Mateo, Calif.-based company lost 25 cents a share on bookings of $770.1 million in the December quarter. Analysts had expected Roblox to lose 12 cents a share on bookings of $772 million, according to FactSet. In the year-earlier period, it lost 30 cents a share on bookings of $642 million.

On the plus side, Roblox had a record number of daily active users in the fourth quarter. It averaged 49.5 million daily active users in the period, up 33% year over year. In the month of January, the number increased to 54.7 million.

Average bookings per daily active user were $15.57 in the fourth quarter, vs. $13.49 in the third quarter.

RBLX Stock Tumbles After Report
In after-hours trading on the stock market today, Roblox stock tumbled 13.7%, near 63.30. During the regular session Tuesday, Roblox stock rose 7.3% to close at 73.30.

"With nearly 55 million daily active users, Roblox is increasingly an integral part of people's lives," Chief Executive David Baszucki said in a news release. "As we look ahead to 2022, we will continue to develop our technology to enable deeper forms of communication, immersion and expression on our platform."

Roblox did not give guidance for the first quarter or year ahead in its earnings release.

Roblox Stock A Play On The Metaverse
Early Tuesday, BBC reported that Roblox's youth-centric social gaming platform contains sexual content. The news organization said Roblox has a problem with user-generated spaces called "condos" where people talk about sex and their avatars can have virtual sex. Roblox told BBC that the activity involves "an extremely small subset of users" and those sites are taken down when they're discovered.

Roblox provides a platform for playing video games and socializing in 3D virtual worlds. But Roblox stock is considered a play on the metaverse, an immersive, next-generation version of the internet.

Roblox stock spiked to a record high of 141.60 on Nov. 22 amid hype about the metaverse spurred by the rebranding of Facebook to Meta Platforms (FB).

Roblox stock ranks ninth out of 21 stocks in IBD's Computer Software-Gaming industry group, according to IBD Stock Checkup. However, it has a subpar IBD Composite Rating of 36 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.

[eastunder]

Is Roblox Stock A Buy Right Now After Q4 Earnings Results?

FacebookTwitterLinkedInShare Licensing

SCOTT LEHTONEN08:57 AM ET 02/16/2022

https://www.investors.com/research/roblox-rblx-stock-buy-now/?src=A00220

San Mateo, Calif.-based Roblox (RBLX) is a popular video game platform that is considered a play on the emerging metaverse, a next-generation version of the internet. Is Roblox stock a buy in the current stock market rally?

Roblox reported its fourth quarter earnings results after the close Tuesday, missing Wall Street's estimates. The company lost 25 cents a share on bookings of $770.1 million in the December quarter. Analysts had expected Roblox to lose 12 cents a share on bookings of $772 million, according to FactSet.

Early Wednesday, Roblox stock plunged more than 21% to trade around 57.50. RBLX shares hit an all-time low on Jan. 28, trading as low as 53.63.

RBLX Stock IPO

The Roblox stock initial public offering (IPO) via direct listing occurred on March 10 with a suggested price of 45 per share. With a direct listing, no new shares in the company are created and sold. Nor did the Roblox IPO raise any capital. Instead, current investors begin selling already existing shares based on demand when trading opens.

On March 10, Roblox stock closed at 69.50, more than 54% above the 45 IPO price. A huge price percentage increase on the IPO day indicates strong institutional backing.

The company's eponymous "Roblox" game is the biggest mobile game of 2020 in the U.S. in terms of revenue, according to Sensor Tower. It surpassed "Candy Crush," which had been the top game for the past three years.

Roblox reported having 32.6 million daily active users at the end of 2020, up 85% from the year-ago period. Revenue jumped 82% in the year to $924 million. It had a net loss of $253 million in 2020, vs. a $71 million loss in the prior year, according to the Roblox IPO filing.

What makes Roblox different from other online game platforms is that it lets users create their own games. Developers receive 30% of the proceeds generated from a game, such as the sale of virtual outfits and avatars.

On Nov. 9, Roblox reported strong third-quarter earnings results. The company reported bookings of $637.8 million in the September quarter, up 28% year over year. Average daily active users increased 31% from a year earlier to 47.3 million in the third quarter. That showed an acceleration in growth from the second quarter, when users rose 29% to 43.2 million. Time spent on the platform rose 28% year over year to 11.2 billion hours in the September quarter. In the second quarter, engaged hours grew 13% to 9.7 billion.

Roblox earned an adjusted 5 cents per share on revenue of $509.3 million. Sales jumped 102% year over year for the third quarter.

On Dec. 15, Roblox reported key metrics for November. The company said daily active users were 49.4 million, up 35% year over year. Estimated bookings for November were between $208 million and $211 million, up 22%-24% year over year. Estimated average bookings per daily active user was between $4.21 and $4.27, down 8%-9% year over year. The company sees November sales between $184 million and 187 million, up 84%-87% year over year. RBLX stock dived 9% in response.

Roblox Stock Is A Metaverse Investing Play

What is the metaverse? The metaverse is considered a next-generation version of the internet. Technologists describe the metaverse as a persistent, shared, 3D virtual environment. There, people meet for activities ranging from playing games to conducting business. It incorporates such technologies as virtual reality and augmented reality.

Mark Zuckerberg, now the chief executive of Facebook parent Meta Platforms (FB), describes the metaverse as "an embodied internet that you're inside of rather than just looking at."

"The metaverse is bigger than gaming," said Christina Wootton, Roblox vice president of brand partnerships. "We're ushering in this new category of human co-experience. It's an immersive place where people can come and connect with one another and have shared virtual experiences. They can do things together, such as work, learn, play, shop and experience entertainment."

Metaverse Stocks To Buy And Watch

Meta Platforms, Microsoft (MSFT) and Nvidia (NVDA) are among the top metaverse stocks to watch in the metaverse space.

Meta Platforms is back below its key 50-day moving average. The company has invested heavily in virtual reality and augmented reality as it builds Zuckerberg's vision of the metaverse.

Microsoft is planning metaverse apps for gaming, like possible transformations of "Halo", "Minecraft" and "Microsoft Flight Simulator" into full 3D worlds. The IBD Leaderboard stock is falling further below its 50-day line.

Nvidia is sharply below its 50-day line for the first time since an Oct. 25 breakout past a cup base's 230.53 buy point. On Nov. 9, Chief Executive Jensen Huang touted Nvidia Omniverse, a virtual world simulation and collaboration platform for 3D workflows.

Roblox Stock News

On Sept. 1, Roblox announced the launch of Vans World, an interactive Vans skateboarding world experience. Vans World is a metaverse playground where players can perform tricks and customize Vans gear and apparel, while hanging out with their friends.

On Nov. 18, Nike launched an immersive world experience — called Nikeland — on Roblox. Players will be able to enter a digital showroom to dress their avatar in Nike apparel and check out the company's latest products.

On Nov. 19, Roblox held a well-received analyst day event in which Roblox executives discussed the company's penetration of new markets such as education and music. The company also said it believes all consumer brands will need a Roblox strategy in the next three to five years.

Morgan Stanley analyst Brian Nowak reiterated his overweight rating on Roblox stock and raised his price target to 150 from 88.

On Feb. 9, The National Football League launched NFL Tycoon to engage the next generation of NFL football fans in the Metaverse. The NFL will be the first official major sports league to offer a persistent experience on Roblox. NFL Tycoon lets fans build, play, and learn in their own NFL-centered world through a combination of the popular tycoon and simulator genres on Roblox.

RBLX Stock Price And Technical Analysis

Roblox stock surged more than 42% on Nov. 9, breaking out past a 103.97 buy point in a consolidation — according to IBD MarketSmith chart analysis. The catalyst was the company's strong earnings. Shares are trading more than 50% off their 52-week high, and are sharply below their key 50-day moving average and long-term 200-day line.

Bullishly, the stock's relative strength line surged to new highs in the wake of the stock's breakout move. But that technical indicator has fallen dramatically during the stock's sharp decline. The RS line measures a stock's price performance vs. the broad market.

According to the IBD Stock Checkup, RBLX stock has a weak 36 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths.

Is Roblox Stock A Buy Right Now?

Roblox stock is one of the top metaverse stocks to watch in the current stock market rally. The video game platform boasts huge sales growth in recent quarters amid the company's potential in the emerging metaverse investing theme.

Shares are now pulling back sharply during the stock market weakness. Amid the current stock market volatility and Roblox's precipitous drop, the stock isn't a buy right now. Wait for the stock to form a new base, which would offer a new buy point.

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RBLX

fin line

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Shareholder Letter dated February 15, 2022

To our shareholders

https://www.sec.gov/Archives/edgar/data/1315098/000131509822000035/rblx-20220215xexhibit992.htm

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RBLX 50.40

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RBLX and a bollie

( NTS: Still zero insider buying)

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RBLX 31.83 +3.03 (10.47%) but on Norm volume

Nice on an intraday but visually nothing on a daily

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RBLX

Day 1 of attempt to move back the 50 day

cpps 33.63

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RBLX open Gaps 27.27


Direction Date range
up Jun-21-2022 27.27 to 27.4

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Roblox Stock Will Thrive as It Monetizes Brand Deals
As Roblox finds ways to monetize, RBLX stock traders can capitalize
https://investorplace.com/2022/08/roblox-rblx-stock-monetize-brand-deals/
1m ago · By David Moadel, InvestorPlace Contributor
Roblox (RBLX) has several different ways to generate revenue from its popular gaming platform.
The company’s most promising opportunity may come from providing explorable spaces to brands.
Investors should understand that RBLX stock is risky but could head much higher.
RBLX stock - Roblox Stock Will Thrive as It Monetizes Brand Deals
Source: Michael Vi / Shutterstock.com

California-based Roblox (NYSE:RBLX) is known for providing gamers with a fun, immersive and interactive platform. There are risks involved for RBLX stock investors as the metaverse is still an emerging field. However, there’s strong upside potential as Roblox can monetize its platform in several ways.

The Roblox gaming platform might appeal to young folks, but it’s a big business and the company’s revenue growth is no joke. Impressively, Roblox’s first-quarter 2022 revenue increased 39% year over year (YOY) to $537.1 million.

Has this revenue growth translated into share-price appreciation? Not necessarily, but this story could still have a happy ending. Roblox still has multiple revenue generation opportunities, including some that might surprise you.

What’s Happening With RBLX Stock?
Suffice it to say that a whole lot has changed since the heady days of late 2021. Back then, growth stocks were in vogue and RBLX stock, at $140, seemed unstoppable.

Lately, however, the tide has turned against hypergrowth stocks. Moreover, some investors might worry about Roblox because the Covid-19 lockdown catalyst of 2020 isn’t helping video game stocks in 2022.

RBLX stock has traded below $50 for a while. However, shares seem to have been on a recovery path since mid-June. Furthermore, the company appears to be doing well, and there’s hard data to prove this.

In May 2022, Roblox’s revenue was estimated to be between $194 million and $197 million, representing a YOY increase of 28%-30%. Also, Roblox counted 50.4 million daily active users (DAUs) in May, up 17% YOY.

Tommy in the Metaverse
Still, without the Covid-19 lockdown catalyst, Roblox must find ways to maintain its pace of revenue growth. Fortunately, the company is able to monetize its vast, immersive virtual world in multiple ways.

One analyst, Needham & Company Managing Director Bernie McTernan, identified three ways that Roblox is able to lean into monetization. First, Roblox can use search and discovery features, in which the platform makes suggestions to help users find content they might like.

Second, there’s advertising. McTernan considers advertising a “massive opportunity” for Roblox. “We have them reaching over a billion dollars of advertising revenue in our bull case,” the analyst estimated.

Then, there’s the user-generated content marketplace. “That’s clothing for avatars,” McTernan clarified. “Historically, that’s all been done in-house by Roblox. They’re opening that up now to users to build it themselves.”

There’s a fourth opportunity, however, which investors should consider. A number of well-known brands have explorable spaces on Roblox’s platform. These brands include Gucci, Nike (NYSE:NKE), Ralph Lauren (NYSE:RL) and Tommy Hilfiger.

So, for example, users can shop for virtual luxury goods in a digital town set up by Gucci. Or, they can visit Tommy Hilfiger’s virtual Tommy Play store on Roblox. You just never know which brands might show up on Roblox’s gaming platform in the near future.

What You Can Do Now
Make no mistake about it: RBLX stock has a lot of catching up to do and could remain volatile for a while.

So, don’t pour too much of your capital into this one stock. However, a moderate position in Roblox shares could be appropriate. If Roblox can continue to find ways to capture revenue opportunities, investors just might have a long-term winner on their hands.

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You suck RBLX

But who doesn't love a big gap down when building?

(Which will appear in the morning.)

20 day sma 42.69
50 day sma 36.68

Open Gaps
Direction Date range
Down Aug 8 2022 46.72 to ?
up Jun-21-2022 27.27 to 27.4

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10/17 gap RBLX 39.19
WD: 10/20 500 37.l3

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RBLX Track fin 35.48

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RBLX going to Gap up
33.34 pps 1/13/23



Roblox Reports December 2022 Key Metrics
Tue, January 17, 2023 at 6:30 AM MST·4 min read

https://finance.yahoo.com/news/roblox-reports-december-2022-key-133000615.html

SAN MATEO, Calif., January 17, 2023--(BUSINESS WIRE)--Roblox Corporation (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, today released certain key metrics for the month of December 2022.

December 2022 Key Metrics

Daily active users (DAUs) were 61.5 million, up 18% year-over-year.

Hours engaged were 4.7 billion, up 21% year-over-year.

Estimated revenue was between $189 million and $199 million, a decline of between 1% - 6% year-over-year.1

Estimated bookings were between $430 million and $439 million, up 17% - 20% year-over-year.1

Estimated average bookings per daily active user (ABPDAU) were between $6.99 and $7.14, which represents a year-over-year change of -1% - +1%.1

[1] The strengthening of the US Dollar against foreign currencies during 2022, particularly the Euro and British Pound, has had an adverse impact on revenue, bookings and average bookings per daily active user (ABPDAU). By adjusting revenue, bookings and ABPDAU for constant currency, we are able to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations. Constant currency is calculated by converting our current period revenue, bookings and ABPDAU into U.S. dollars using the comparative prior period’s monthly exchange rates for our non-USD currencies.

We estimate that the impact of foreign currency fluctuations led to a reduction of approximately 1% in the year-over-year growth rate for December 2022 revenue and 2% - 3% in the year-over-year growth rate for December 2022 bookings. Thus, on a constant currency basis, we estimate our year-over-year December 2022 revenue decline would have been between -5% - 0%, our year-over-year December 2022 bookings growth would have been 20% - 22% and our year-over-year December 2022 ABPDAU growth rate would have been 1% - 3%.

Discontinuation of Monthly Key Metrics Releases

Following the expected release of our March 2023 monthly metrics in April 2023, the Company will cease publishing monthly metrics. By April, we will have published monthly metrics over our first eight quarters as a public company. While we think that has provided incremental information to investors regarding the seasonality of the business, we have decided to cease providing monthly metrics to align our reporting cadence with our value of taking the long view. Key metrics will continue to be published on a quarterly basis aligned with the Company’s other quarterly disclosures, including its shareholder letter and other quarterly publications.

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RBLX 33.21

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RBLX Gap 35.77 and cpps 38.85
Day 4 since made

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RBLX - Gapping down in Pre (tracking 39.98)

Close Friday @ 45.70





Roblox Reports March 2023 Key Metrics
8:30 AM ET, 04/17/2023 - Business Wire

SAN MATEO, Calif.--(BUSINESS WIRE)--Apr. 17, 2023--Roblox Corporation (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, today released certain key metrics for the month of March 2023.

March 2023 Key Metrics

Daily active users (DAUs) were 66.2 million, up 26% year-over-year.
Hours engaged were 4.8 billion, up 26% year-over-year.
Estimated revenue was between $212 million and $223 million, up 15% - 21% year-over-year.1
Estimated bookings were between $247 million and $255 million, up 23% - 27% year-over-year.1
Estimated average bookings per daily active user (ABPDAU) were between $3.73 and $3.85, which represents a year-over-year change of -2% - +1%.1

[1] We estimate that the impact of foreign currency fluctuations led to a reduction of approximately 2% in the year-over-year growth rate for both March 2023 revenue and bookings. Thus, on a constant currency basis, we estimate our year-over-year March 2023 revenue growth would have been between 16% - 22%, our year-over-year March 2023 bookings growth would have been 25% - 29% and the change in year-over-year March 2023 ABPDAU would have been between -1% and 3%.

Constant currency is calculated by converting our current period revenue, bookings and ABPDAU into U.S. dollars using the comparative prior period’s monthly exchange rates for our non-USD currencies, rather than the actual average exchange rates in effect during the current period. By adjusting revenue, bookings and ABPDAU for constant currency, we are able to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations.

Discontinuation of Monthly Key Metrics Releases

This release marks the Company’s last monthly metric release. We have now published monthly key metrics over our first eight quarters as a public company. While we believe that has provided incremental information to investors regarding the seasonality of the business, we have decided to cease providing key monthly metrics to align our reporting cadence with our value of taking the long view. Key metrics will continue to be published on a quarterly basis aligned with the Company’s other quarterly disclosures, including its shareholder letter and other quarterly publications.

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RBLX earnings Wednesday B4 bell
cpps @ 36.38 Gap @35.23

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RBLX Gaps up @ 39.77 (5/11) 35.23 (5/5)

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RBLX 41.89

Gap 35.23 open

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RBLX 44.91

+3.34 (+8%) but currently on lower volume

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RBLX CUP w/ Handle 15% Depth 29% Length currently 77 days Pivot 46.25

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(RBLX) Buy the Dip in These 2 Beaten-Down Stocks, Say Analysts
TipRanks

Sun, August 13, 2023 at 7:02 AM MDT·7 min read
In this article:

RBLX -2.55%
KRNT-0.39%

https://finance.yahoo.com/news/buy-dip-2-beaten-down-130201012.html

Everyone likes a bargain and the same is true in the stock market. But while picking up items on sale in a store is a simple task, picking up shares on the cheap is a more complex endeavor.

That’s because a cheap stock often means that it has been through the wringer, and the immediate question that comes to mind is, why have the shares taken a beating?

A beaten-down stock could be down for a whole host of reasons, from weak fundamentals to broader macro concerns to unreasonable behavior by investors. The trick of course in buying the dip, as the saying goes, is to recognize the names that are only temporarily down and are due to push ahead once again.

But how to find these bargains? Some advice from the Wall Street pros could come in handy here. Their job after all is to point out which stocks are worth leaning into at any given time.

With this as backdrop, we opened the TipRanks database to get the lowdown on two stocks that have witnessed a big drop recently, but which certain Street analysts are recommending investors participate in the time-honored act of “buying the dip” ahead of an anticipated rise. Here are the details.

Roblox Corporation (RBLX)

We’ll start with a look at a gaming and metaverse company, Roblox. Roblox has been around since the early 2000s, offering users an interactive platform to create, play, and share games – and to interact with each other through them. Roblox bills itself as a metaverse company, giving its users more than the usual online experience can offer. The company has combined community building with gaming, to foster creativity and positive relationships across its user base.

Some numbers will give the scale of Roblox’s operations. As of the end of Q2 this year, Roblox could boast some 65.5 million daily average users, who collectively spent more than 14 billion hours engaged with the platform. This huge user base makes Roblox one of the world’s top platforms for the under-18 audience. The company is popular with its target users, and credits that popularity to its ability to develop community among users, gamers, and developers.

In the recently reported 2Q23 results, Roblox showed an increase at the top line. Revenues came in at $680.8 million, for a 15% gain year-over-year.

Other results were not as solid. The bottom-line earnings, a net-loss EPS figure of 46 cents per share, compared unfavorably to the 30-cent net loss EPS from 2Q22, but was 2 cents less than had been anticipated. The company delivered $38 million in adjusted net EBITDA and reported $780.7 million in bookings, a forward-looking metric that came in well above the $639.9 million from the year-ago quarter.

However, the results were not what the analysts were looking for. Expectations for bookings were $785 million, and for EBITDA to hit $46 million. The miss here was decisive, as RBLX shares are down 23% this month, with most of the loss coming after the earnings release.

For Wedbush analyst Nick McKay, the key points here are Roblox’s strong position and user base, combined with a lowered price that gives investors an attractive entry point. McKay writes of Roblox, “Q2:23 results brought light to some soft spots within the company, but we think that the data trackers, seasonality, and stubbornness contributed to the misses. On balance, however, Roblox may have the most compelling growth trajectory among the video game names in our coverage universe after taking into account its user base size, its new products, and the potential to revisit its approach to profits.

“With Roblox shares trading well below our price target after a selloff, the risk/reward profile has become favorable to the upside… We expect patient investors to be rewarded by continued topline growth coming from the expansion of key user metrics, a slew of new product introductions, and a more aggressive approach to cost control in future periods,” McKay went on to add.

Looking forward for RBLX shares, McKay rates the stock as Outperform (a Buy), with a $37 price target implying a one-year upside of 24%. (To watch McKay’s track record, click here)

The Street generally has also come to a bullish stance on Roblox, with 18 recent analyst reviews breaking down into 12 Buys, 2 Holds, and 4 Sells, for a Moderate Buy consensus rating. The $29.83 trading price and $39.05 average price target combine to give an upside of 31% for the year ahead.

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RBLX 28.90
9-5-23

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RBLX

10-3-23

28.23

Roblox Corp (Nyse: RBLX )

SEC, nasdaq, ShortSqueeze

Finviz, StockTA, Stoxline,