![]() ![]() However, it is important to remember that Roblox as a company has done nothing to innovate or stay current as trends have shifted. That has certainly helped drive RBLX stock. The Bottom LineĪs Reuters reports, the gaming sector as a whole has been weakening throughout 2022 as more and more people have opted away from indoor activities. It doesn’t help that in November 2022, the company reported wider-than-expected Q3 losses, sending RBLX down even further and making investors nervous. ![]() But now, with both fads behind it, RBLX stock is falling fast with no catalysts in sight to help it regain momentum. It was able to ride its pandemic gains into late 2021 as the race to the metaverse began. The company surged during the early 2020 Covid-19 lockdowns while consumers stayed at home. The metaverse boom isn’t the only market phenomenon from which Roblox has failed to adapt, though. “Roblox is widely viewed as a metaverse play, and leftover euphoria about that phenomenon, likely sparked by the enthusiasm of Meta Platforms (NASDAQ: META) CEO Mark Zuckerberg, probably explains the overdone valuation of Roblox.” For this reason, InvestorPlace contributor Larry Ramer saw it as a stock to sell before the November report. But now, investor focus is elsewhere and metaverse momentum clearly can’t be relied upon to spur growth. RBLX stock benefitted from the metaverse rush that became a defining market trend of early 2022. This isn’t unexpected when we consider how the gaming sector has shifted since November 2021. The immediate takeaway from the Roblox report is that growth is slowing for the gaming developer. Additionally, average bookings per daily active user have declined between 7-9% year-over-year (YOY). ![]() Its overall daily active user growth tells a similar story, rising 15% against last year’s 35%. It is also less than analysts were estimating. That’s a 5-7% increase for the year, but it’s still a significant step down from the 22% to 24% bookings growth that Roblox reported for November 2021. Estimated bookings for the month came in between $222 million and $225 million. It’s important to examine the recent report that is pushing RBLX stock down in context. ![]()
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