- Despite the surge of interest, Roblox is currently extremely overvalued compared to any of the traditional gaming players.
- While revenue has grown fast, this growth has come mainly from an expanding player base, while the average spending per player stagnates.
- To keep growing, the company is trying to target the older players, but we believe the company lacks competitiveness in that space and will fail to meet its growth expectations.
- However, the company still has the ability to fix some of these underlying issues and could pivot to different growth avenues, so aggressive shorting could backfire.
For further details see:
Roblox: Sell If You Own, Short With Caution