I recently covered Roblox (RBLX 2.43%), 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 0.39%), Disney (DIS 0.84%), 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 1.17%), Nintendo (NTDOY 0.51%), Take-Two Interactive (TTWO 0.72%), and Activision Blizzard (ATVI).
In the below video, I provide growth analysis comparing these companies, as well as Shopify (SHOP 0.92%), Twilio (TWLO 2.66%), Cloudflare (NET 0.94%), Roku (ROKU 2.66%), and Unity Software (U 2.51%). 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.