Roblox stock ( NYSE:RBLX ) has fallen 75% from its highs, but it doesn’t mean it’s a good buy.
Investors may be weary about Roblox stock due to decreasing performance indicators.
Roblox Stock: A stock with high upside potential and a significant fall
In 2020 and 2021, Roblox attracted millions of daily active users (DAUs). Investors were enthralled, and it became known as a “pandemic stock.”
Roblox stock (NYSE: RBLX) was trading at $141.60 per share in November 2021. Since then, its value has dropped by 75% (64% only in 2022). Many of these so-called pandemic equities lost their appeal when pandemic shutdowns lessened. Those who could continue growth and improve metrics were potential excellent acquisitions. Roblox stock (NYSE: RBLX), however, is not one of them.
Roblox revenue is declining.
They prefer to give newer public firms flexibility in becoming profitable since investors recognize that growth comes at a cost early on. They are prepared to invest early, allowing management to spend effectively building the organization and enjoy the benefits afterward. But what happens when growth suddenly slows?
Roblox’s year-over-year revenue growth has increased from 140% to 30% in only five quarters.
Revenue and growth rate of Roblox
Tough year-over-year comparisons are acceptable when the preceding year’s increase was so astronomical. It’s also logical that the rate will fall somewhat as the numbers increase. However, the relatively rapid fall is concerning since these causes are unlikely to account for the whole decrease.
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