why is roblox stock going 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 ...

Is Roblox a good stock to buy now?

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. Stockholders will need to wait out the storm and keep their long position in Roblox.

Will Roblox stock go back up?

Roblox is unlikely to trade up to such lofty valuations, with market consensus expecting both the company's revenue growth rate (+15.3%) and EBITDA margin (+19.2%) to be relatively modest or below 20% in FY 2022.

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 Roblox a Buy Sell or Hold?

Roblox has received a consensus rating of Hold. The company's average rating score is 2.38, and is based on 8 buy ratings, 6 hold ratings, and 2 sell ratings.

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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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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What happened

Shares of online gaming platform Roblox (NYSE: RBLX) ran up sharply on Thursday morning, putting the company on course for a sixth straight trading day of gains. At one point, Roblox was up by more than 11% before giving back all those gains -- and more -- in the afternoon. As of 1:55 p.m. ET, Roblox stock is actually down 2.1%.

So what

At least three Wall Street analysts have raised price targets on Roblox since close of trading Wednesday. The most optimistic of these estimates, from Morgan Stanley 's Brian Nowak, is calling for about an 18% rise in Roblox's value to $150 a share -- and potentially as high as $230 -- over the course of the next 12 months.

Now what

Not everyone is quite as enthusiastic about Roblox as Morgan Stanley, however. According to TheFly.com, two more analysts chimed in with higher price targets Thursday: Stifel's Drew Crum posited a $134 target price, but Atlantic Equities' Kunaal Malde only went as high as $125.

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community.

What is the ticker symbol for Roblox?

Roblox trades on the New York Stock Exchange (NYSE) under the ticker symbol "RBLX."

When does Roblox lock up expire?

Roblox's lock-up period expires on Monday, September 6th. Roblox had issued 198,917,280 shares in its public offering on March 10th. The total size of the offering was $8,951,277,600 based on an initial share price of $45.00.

What is Roblox Corporation?

Roblox Corporation develops and operates an online entertainment platform. It offers Roblox Client, an application that allows users to explore 3D digital worlds; and Roblox Studio, a toolset that allows developers and creators to build, publish, and operate 3D experiences and other content. The company also provides Roblox Cloud, a solution that provides services and infrastructure to power the human co-experience platform. It serves customers in the United States, Canada, Europe, the Asia-Pacific, and internationally. Roblox Corporation was incorporated in 2004 and is based in San Mateo, California.

Does Roblox pay dividends?

Roblox does not currently pay a dividend.