Should I Invest in Roblox Stock?

Roblox is an online game platform and game creation system that brings people together through play.


Roblox Corporation
company nameRoblox Corporation
sectorCommunication Services
industryElectronic Gaming & Multimedia
address970 Park Place, San Mateo, CA, United States
countryUnited States
websitehttps://corp.roblox.com
Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Read our Advertising Disclosure.

Roblox stock (RBLX) is on a tumultuous journey in the market lately. It made a significant drop following the soaring success of their initial public offering just under one (1) year ago. 

This company created a truly unique gaming experience that saw explosive growth. Especially during the COVID-19 pandemic. Things have slowed down a bit, but here’s why this momentary setback won’t get in the way of Roblox’s innovation - and why it’s wise to invest now.

When share prices drop, some investors (especially newer, less experienced ones) tend to get a little uneasy. It makes sense. People invest in stocks in order to eventually earn money from it, and dropping prices makes that profit seem temporarily out of reach.

It's easier to say than to do, but don't worry. By its very nature, the market is constantly in flux. Every stock - for every company - experiences gains and losses. 

That's just the nature of the beast.  Roblox is constantly evolving and expanding along with advancements in technology and the market itself.

In short, a temporary low is just that, temporary. Don't let it scare you away from making an investment.

Best trading app to buy Roblox stock
Webull
Webull icon

Quick Summary

Account Minimum: $0

Trading Fees: $0

Promotion: Get 2 Free stocks when you signup

What is Roblox?

People who aren’t familiar with this company tend to believe that they just create kid’s games. However, Roblox is actually an entire online gaming platform where people (not just kids) can play games and create them. 

Far from being just one (1) game, Roblox hosts well over a million games which are available to roughly four million (4,000,000) users.

The way it works is similar to platforms like Steam, in which users can search and find games to play. With one big difference: all of the games on the platform are user-created.

Although Roblox only went public in March 2021, they’re an established corporation that’s been around for the better part of two (2) decades. Steadily growing until an unprecedented explosion of users during the COVID-19 pandemic and subsequent lockdowns.

The reason for their longevity is their constant evolution along with emerging technologies and trends. The current metaverse trend, exploring the concept of virtual spaces, fits right in with Roblox’s modus operandi. 

In fact, even prior to the announcement of Facebook’s rebrand to Meta, Roblox held a virtual Twentyone Pilots concert that drew in roughly thirteen million (13,000,000) viewers. 

To put that massive number into context, the largest stadium in the United States, Michigan Stadium, holds just over 100,000 people. The number of viewers at the Roblox Virtual Music Event would fill up 130 Michigan Stadiums. 

That kind of viewership is no small feat and speaks to the innovation and positive long-term prospects of the company.

Who’s Behind Roblox’s Success?

The company was originally founded by David Baszucki and Erik Cassel. Over the years, their staff grew to include over 1,000 employees.

As the company grew, changes were implemented to ensure the best possible user experience, including safety measures for the many minors in its audience.

Today, the management team boasts a full roster of industry giants. Included among them is Chief Product Officer (CPO) Manual Bronstein, the former Vice President of Product at Google and YouTube. 

Craig Donato, Chief Business Officer, who’s responsible for brand engagement, marketing, and creating a safe environment for users, was behind the development of the massive neighborhood network app Nextdoor

On the financial side of things, CFO Mike Guthrie works tirelessly at driving the company’s growth on a global and sustainable level and securing new and profitable business opportunities.

So, it’s safe to say that the masterminds behind Roblox are a force of nature with a long career of innovation ahead of them.

Bear Case

Despite the ingenuity and massive potential for growth, Roblox's share prices have experienced a significant recent downfall. 

Some of the risk factors that current and potential investors see for the company include the “pandemic stock” factor. This means a fear that the stock’s meteoric rise was just related to the increase of bored kids at home during the pandemic. 

Other worries include the “aging up” of current Roblox users. Since the company is geared toward children, some investors think that their currently huge viewership will, eventually, lose interest and move onto something more age-appropriate. 

There are also concerns about the safety of the platform for younger users, since such a large web community has the potential of exposing minors to unsuitable language or content.

Especially on a platform containing all user-generated content, safety measures to protect younger users are a constant high priority.

Bull Case

Analysis of the Roblox Corporation and the platform's users will reassure worried investors that many of the concerns expressed above aren’t a risk factor for the future of the company.

For example, the fear about the “pandemic stock” was assuaged by the fact that the company continued to grow in late 2021. In other words, younger users returned to school and an in-person social life, but didn’t leave the platform.

Roblox's user-created content means that the people who are playing the games also have the ability to transform the platform to meet their needs.

Additionally, the majority of revenue comes from in-game micro-transactions (extra purchases [in addition to the initial game price] players can make in order to experience more features of the game).

So, more users and more games means more money. This also means that as users get older, their content follows their interests.

Once and for all putting to bed the idea that there’s a certain point at which people are “too old” to use the platform. In fact, the number of teen and adult users has only increased, reaching over one million (1,000,000) as of November 2021.

Roblox Competitors

UUnity Software Inc.
$40.21
SymbolU
Price$40.21
Change$1.44
Change %3.46%
Volume$6,588,693.00
Marketcap11.90B
TTake-Two Interactive Software,
$117.26
SymbolTTWO
Price$117.26
Change$2.51
Change %2.09%
Volume$4,381,446.00
Marketcap13.58B
AActivision Blizzard, Inc
$77.07
SymbolATVI
Price$77.07
Change$0.67
Change %0.86%
Volume$2,843,625.00
Marketcap60.26B
SShopify Inc.
$352.96
SymbolSHOP
Price$352.96
Change$38.37
Change %9.81%
Volume$4,868,904.00
Marketcap44.30B

Final Verdict

The current dip in share prices for Roblox (RBLX) isn’t a reason for panic. No investor with a general understanding of the Robox platform and its projected future will be selling their shares.

So, if you're a current investor in Roblox, keep a tight hold on your share/s.  Roblox (RBLX), by its very nature, is always on the cutting-edge of trends.

The growing global interest in the metaverse (and virtual spaces) bodes well for the future and value of the company. In short, the future looks bright for Roblox.

As the platform adapts to continually increasing users of all ages, there’s no better time than now to stay on the cutting-edge of stock trends and start investing in shares.

Should you invest $1,000 in Roblox right now?

Before you consider the Roblox, you'll want to hear this.

An award-winning analyst team just revealed what they believe are the 10 best stocks for investors to buy right now... and the Roblox wasn't on the list.

The online investing service they've run for nearly two decades, Motley Fool Stock Advisor, has beaten the stock market by over 4X.* And right now, they think there are 10 stocks that are better buys.


You may also like