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?
Early Thursday, Roblox shares tumbled more than 4%, trading around 28 a share, after Citigroup lowered its price target from 53 to 51. Citigroup maintained its buy rating.
On Aug. 9, Roblox shares crashed nearly 22% after the videogame company reported earnings below analysts’ expectations. Roblox lost 46 cents per share on bookings of $781 million.
For the June-ended quarter, Roblox notched $781 million in net bookings and $38 million in adjusted earnings before interest, taxes, depreciation and amortization. Analysts polled by FactSet were expecting $785 million and $46 million, respectively.
RBLX Stock IPO
The Roblox stock initial public offering (IPO) via direct listing occurred on March 10, 2021 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, 2021, 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 was one of the top five biggest mobile games of 2022 in the world in terms of revenue, according to Finbold. The Roblox mobile game showed player spending of $861.86 million in 2022.
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.
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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….