Roblox, which is based in San Mateo, California, is a popular platform for video games. It is considered to be a take on the metaverse, the next-generation of the Internet. Is Roblox a good buy during the current stock market rally or not?
Roblox shares fell as much as 23 percent on Wednesday after the company's earnings were below analyst expectations. Roblox lost 46c per share on $781 million in bookings.
Roblox's June quarter ended with $781 million net bookings, and $38 millions in adjusted earnings before taxes, interest and amortization. FactSet polled analysts who expected $785 million in net bookings and $46 millions in adjusted earnings.
RBLX Stock Initial Public Offering
The Roblox direct listing IPO (initial public offering) took place on March 10, 2020 with a price per share of 45. A direct listing does not create or sell any new shares of the company. The Roblox IPO did not raise any capital. When trading begins, existing investors start selling their shares according to demand.
Roblox closed its stock at 69.50 on March 10, 2021. This is more than 54% higher than the 45 IPO. The huge increase in price on the IPO date indicates a strong institutional backing.
Roblox Fundamental Story
Finbold says that the company's "Roblox" mobile game is one of the five largest games in terms of revenue in 2022. In 2022, the Roblox mobile game had a player spend of $861.86 millions.
Roblox is different from other platforms because it allows users to create their own games. Developers get 30% of all proceeds from games, including virtual avatars and outfits.
Roblox Stock is a Metaverse Investment Play
What is the Metaverse? The metaverse can be viewed as a new-generation version on the internet. The metaverse is described by technologists as a shared, persistent 3D virtual world. People gather there for a variety of activities, from gaming to business. It uses technologies like virtual reality and augmented realities.
Mark Zuckerberg (CEO of Meta Platforms, parent company of Facebook) describes the Metaverse as an "embodied internet" that you are inside rather than only looking at.
Christina Wootton is the Roblox Vice President of Brand Partnerships. She said, "The metaverse goes beyond gaming." "We are ushering this new category of co-experience between humans. It's a place where people can connect and share virtual experiences. "They can work together, learn, play, and shop, as well as experience entertainment.
RBLX Stock Analysis and Technical Analysis
Roblox's stock price bottomed at 21,65 in May 2022. According to IBD MarketSmith's chart analysis, during a volatile rise in the stock, shares formed a cup and handle with a buy point of 46.25.
Due to the collapse on Wednesday, this buy point no longer holds true. Investors will need to wait until a new entry.
RBLX has a poor 32 IBD Composite rating out of 99. This is according to the IBD stock checkup. The Composite Rating is a mix of fundamental and technical metrics that helps investors identify the strengths of a stock.
What is the current value of Roblox stock?