![]() ![]() Growth investors should continue accumulating the stock and holding it for the next few years. Value investors should wait for another potential dip in the stock, to capture a bigger margin of safety. Assume strong growth this year and next, followed by a slight decline. Fiscal Years EndingĪbove are the revenue projections over the next five years. Readers may bookmark the link above or open it to change the assumptions. The model uses an EBITDA Exit multiple to calculate Terminal Value after five years. In the five-year discounted cash flow EBITDA model above, RBLX shares have a fair value of around $80. This suggests that the stock is already trading at close to fair value. Unfortunately, the seven analysts who rate the stock as a “buy” have an $85 price target ( per Tipranks). Still, it has a strong valuation rating score:Īs Roblox reports strong revenue growth, expect the growth score to rise from here. ![]() Roblox does not score that well overall or on growth. It has a strong, young, and talented developer community in the region. In China, Roblox is in the early phases of breaking out on growth. The strong management team suggests that the company will not miss expectations. For example, Roblox still has to increase its growth in North America, Europe and the United Kingdom. Chief Financial Officer Michael Guthrie said on the conference call that the company is nowhere near “close to being done” on growing geographically and by age demographic.ĭespite trading at a price-to-sales of around 44 times, RBLX shares are growth investments whose revenue will keep growing. Its user base benefits from the age demographic. Roblox’s IPO gives the company the capital it needs to grow the business. As long as the average bookings per DAU are in the double digits (at $15.48 in Q1), investors should stay content. This audience will offer strong recurring revenue over the next several quarters. For example, the U13 (under 13) category is growing very well. The company needs to foster its ecosystem, capturing growth globally and attracting users across all major age groups. In the gaming space, user growth matters more than profits in the near term. ![]()
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