3 Things That Smart Investors Know About Roblox Stock
Investors were disappointed with the latest earnings results out of Roblox (NYSE: RBLX). The digital entertainment platform specialist achieved another quarter of strong customer engagement in the selling period that ran through late June. Yet Wall Street chose instead to focus on the company's decelerating sales growth rate as compared to the prior quarter.
Smart investors know to look past quarter-to-quarter volatility in favor of more enduring factors like customer loyalty, scale, and brand power. Let's take a closer look, then, at three things that really matter about this business and that will likely determine whether shareholders see good returns from the stock over time.
Wall Street focused on Roblox's slowing sales growth as a potential cautionary flag. That's understandable given that shares had rallied in 2023 partly on the expectation that revenue would continue its positive trajectory. Sales rose just 2% year over year in Q4 but rebounded to a 22% year-over-year increase in Q1 of 2023. Q2's 15% year-over-year jump was a letdown by comparison and it pressured the stock price immediately following the earnings announcement.
Source Fool.com
