why did roblox stock go down

Full Answer

Should you buy Roblox stock right now?

They just revealed what they believe are the ten best stocks for investors to buy right now... and Roblox Corporation wasn't one of them! That's right -- they think these 10 stocks are even better buys. Rich Smith owns shares of Roblox Corporation. The Motley Fool owns shares of and recommends Roblox Corporation.

Is Roblox stock poised to rally soon?

So there is sort of a pause in that rally," Fiona Cincotta ... flat as a pancake after gains in travel-related and healthcare stocks offset commodity-linked weakness. Positive headlines on ...

Is Roblox stock a smart investment?

Roblox's stock is richly valued, with its growth on the verge of falling off a cliff. School reopenings will significantly drive a decline in its core user base of 5- to 12-year-olds.

Is it too late to buy Roblox stock?

Roblox has a market capitalization of US$37b, so it's too big to fly under the radar ... It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you ...

Why did the Roblox stock drop?

The stock had fallen 77% year to date as investors soured on high-growth tech stocks. The company, which offers a platform that allows users to make games and interact in virtual worlds, said daily active users hit 54.1 million, up 28% from the first quarter of 2021.

Is Roblox a good stock?

Shareholders will need more patience betting on Roblox's strong prospects. The company is a great buy as young gamers spend more time on the platform. But even after falling from the $141.60 high set in November 2021, the stock could get cheaper. The market will remain irrational longer than some will expect.

Can Roblox stock recover?

A rebound in RBLX's shares is likely to happen in 2H 2022, when the company's bookings growth accelerate again benefiting from an easier base for comparison. But a recovery to the $70 price level is quite challenging considering the implied valuation multiples and the weakness in Roblox's US & Canada region.

Is Roblox stock expected to rise?

Stock Price Forecast The 16 analysts offering 12-month price forecasts for Roblox Corp have a median target of 34.00, with a high estimate of 61.00 and a low estimate of 21.00.

Is Roblox profitable 2022?

For 2022, revenues are expected to be in the range of $203 million to $207 million per month. Using an estimated revenue run rate of $200 million per month, the full year forecast is $2.4 billion. This implies a growth rate of 26% from 2021. Another, positive factor is its ability to generate positive free cash flow.

Is Roblox a Buy Sell or Hold?

Roblox has received a consensus rating of Hold. The company's average rating score is 2.31, and is based on 7 buy ratings, 7 hold ratings, and 2 sell ratings.

Is it too late to buy Roblox stock?

It's not too late to buy Roblox, but more price-conscious investors may want to keep it on their watchlist to see if market volatility brings a more attractive entry point.

Is RBLX a buy now?

Shares are now pulling back sharply and are significantly off their 52-week high. 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.

How high is Roblox expected to go?

The 16 analysts offering 12-month price forecasts for Roblox Corp have a median target of 38.50, with a high estimate of 61.00 and a low estimate of 21.00. The median estimate represents a +17.09% increase from the last price of 32.88.

What will Roblox look like in 2030?

Roblox went public via a direct listing this March with a reference price of $45. The stock opened at $64.50, and currently trades in the high $80s -- which gives it a market capitalization of nearly $50 billion. For Roblox to become a $1 trillion company by 2030, the stock would need to rise about 20 times.

Is Roblox a sell?

Roblox (RBLX 5.63%) has gained millions of daily active users, and revenue has exploded. The stock responded to the business's success, rising to over $120 per share at the peak. However, the stock has fallen sharply off the highs and is now trading at $50.

What is Roblox target price?

Stock Price TargetHigh$61.00Low$21.00Average$37.63Current Price$27.76

NYSE: RBLX

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Roblox's long-term prospects look promising, but there are some short-term concerns

Online game platform and game creation system Roblox ( RBLX -8.75% ) has performed well since its direct listing last year -- its shares began trading at around $60 and subsequently more than doubled over the next few months to hit a high of $141.60.

A solid quarterly result but with weaker growth

The COVID-19 pandemic has been disrupting industries of all kinds, especially airlines and hospitality, for almost two years now. For some companies though, COVID-19 has actually helped accelerate growth.

NYSE: RBLX

While solid, these numbers were weaker when compared to the previous quarters. For perspective, revenue grew 127% and 140%, respectively, in the prior two quarters. Besides, Roblox reported that total engagement hours in November 2021 -- while up 32% year over year -- came in weaker than the 4 billion hours clocked in August 2021.

Investors are moving away from growth stocks

The last two years were a great time to own growth stocks, with highflyers like Tesla rising more than tenfold between 2020 and 2021. The rising tide, however, has been lowered toward the second half of last year.

What's next for Roblox

Overall, Roblox's weaker growth and the change in investor sentiments toward high growth (but loss-making stocks) likely caused its share price to fall. Still, the company's long-term prospects remain largely intact.

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Is Roblox's growth slowing down?

But with vaccinations ramping up and people returning to more outdoor activities, Roblox's growth appears to be slowing. Worse still, decelerating growth is arguably not reflected in Roblox's stock price. Even after today's losses, its shares are currently trading for roughly 18 times analysts' revenue estimates for 2021.

Is Roblox growing?

But with vaccinations ramping up and people returning to more outdoor activities, Roblox's growth appears to be slowing.

What happened

Shares of Roblox ( RBLX -8.68% ) were down 18.4% week to date through Thursday's close, according to data provided by S&P Global Market Intelligence. In its latest fourth-quarter report, the gaming platform posted decelerating growth in key operating metrics and issued a weak outlook for the year ahead.

So what

The more important metric that analysts watch is bookings, a non-GAAP (adjusted) measure of revenue. Growth in this metric has decelerated significantly over the last four quarters, from 161% in the year-ago quarter to just 20% in the fourth quarter.

Now what

These are likely just near-term speed bumps, as Roblox laps spikes in demand a year ago. While bookings growth is slowing, it's important to remember that time spent on the platform is still above 10 billion hours, which is close to record highs for the company. Overall, the collapse in the share price can be blamed on valuation concerns.

What happened

Shares of Roblox (NYSE: RBLX) were down 9.8% as of 10:32 a.m. ET on Wednesday, following the release of November engagement metrics.

So what

Investors were disappointed to see slowing growth in daily active users (DAUs) and time spent on the platform -- two key operating metrics that investors closely watch for insights about how well Roblox is attracting and retaining users.

Now what

The most important outcome of slowing engagement trends is how it impacts user monetization, since the more time spent on the platform is supposed to correlate to higher sales of Robux, the virtual currency used to unlock new experiences on the platform.

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