I recently covered Roblox (RBLX +2.92%), sharing my thoughts in a 25-minute deep-dive analysis video. In case you are not familiar, Roblox is a platform that brings players and developers together. The company's mission is to enable billions of people from across the world to have fun, learn, and play. Roblox is built on a strong foundation of millions of developers who produce immersive "experiences" using Roblox Studio. In fact, Roblox has over 8 million developers and has over 50 million "experiences" or games available to users on the platform.
Based on average monthly visits and time spent playing, Roblox is ranked as a top entertainment platform for audiences aged 18 and under. However, Roblox is making a push to attract older audiences as well. Roblox has successfully leveraged advertising and strategic partnerships with Netflix (NFLX 1.51%), Disney (DIS 0.30%), and more.
One of the major hurdles with Roblox is trying to place a value on the stock. It has a unique business model with explosive growth, but is this growth sustainable after the pandemic? Probably not completely, but the growth still dominates video game peers such as Electronic Arts (EA +0.21%), Nintendo (NTDOY 0.95%), Take-Two Interactive (TTWO 0.21%), and Activision Blizzard (ATVI +0.00%).
In the below video, I provide growth analysis comparing these companies, as well as Shopify (SHOP +5.12%), Twilio (TWLO +2.25%), Cloudflare (NET +8.68%), Roku (ROKU 1.21%), and Unity Software (U +4.79%). My belief is that Roblox is in its own unique niche, and I'll use various metrics to compare these companies and determine a fair price for Roblox.
Since going public, Roblox stock has rallied to a high of nearly $104, but has recently pulled back. The stock is trading down over 25% from the highs, so is it a buy now? Please watch the below video for my analysis on the company and opinions on the stock price.
*Stock prices used in the below video were during premarket trading of July 27, 2021. The video was published on July 27, 2021.
