Is Roblox Stock A Smart Investment?
Roblox stock is making one headline after another since hitting the market. And investors are considering this online gaming platform for their portfolios as the stock price continues to soar. However, will this growing company continue its rise on the market? Is it a smart investment for short or long-term investors?
Roblox Stock History and Background
Roblox (NYSE: RBLX) went public on March 10, 2021. In just short of a week, the gaming business was thriving on the market and grabbing a lot of attention in the process.
And this comes as no surprise after projections fell well below the opening trading price. The New York Stock Exchange (NYSE) set a reference price of $45 for Roblox stock before the initial public offering. However, the stock began trading at $64.50 and ended its first day on the market at $69.50.
What many traders saw as just another gaming company has now become a viable investment with loads of upside. In fact, Roblox has created an ever-growing network and community that will drive its monetization.
Investors are taking notice. Stifel, a globally-recognized investment firm, is rating Roblox stock a “buy” with a price target of $85 and an upside of 18%.
“Digital content creation and usage has emerged as one of the most popular forms of entertainment, which combined with Roblox’s large and growing ecosystem of users and developers, bodes well for the company,” Stifel noted. “The model is unlike any we’ve encountered.”
Roblox currently has more than 40 million users and nine million developers. They all converge on an online social gaming platform where new games are created in a flash and spread amongst the users.
Some games take off in popularity while others fall short of the mark. Nevertheless, Roblox has created a unique community of gamers and developers alike. And investors are ready to benefit from this innovative company now that it’s gone public.
Should You Invest in Roblox?
It’s clear that Roblox is becoming a major player within the gaming industry and investors are sure to reap the rewards. But is it smart to invest in Roblox stock now?
Since the Roblox IPO, the stock was up more than 60% before much of the market fell apart. But now Wall Street analysts are pushing the interest even further after Stifel’s rating was released.
In the long run, Roblox is looking more like a safe play for investors. But there are risks to consider.
Roblox put together a strong 2020 and 2021. And as the platform continues to grow, issues will arise that may be a cause for concern. One such concern already circling the platform is potential safety issues for younger users, which Stifel noted in their report.
However, it’s clear that Roblox stock has upside potential due to its innovative network. The platform provides a highly social environment for gamers and developers that has an entertainment value unlike anything else in the industry.
Investing in Gaming Companies
From Nintendo (OTC: NTDOY) to Microsoft (Nasdaq: MSFT), there is a wide range of gaming companies that are publicly traded. And you may bring in massive gains if you stay ahead of the trends and do your research.
Roblox, for instance, is trending in the right direction at the current moment. Investors of all experience levels should keep a close eye on Roblox stock over the coming months.
About Corey Mann
Corey Mann is the Content Manager of Investment U. He has more than 10 years of experience as a journalist and content creator. Since 2012, Corey’s work has been featured in major publications such as The Virginian-Pilot, The Washington Post, CNN, MSNBC and more. When Corey isn’t focusing on Investment U, he enjoys traveling with his wife, going to Yankees games and spending time with his family.