Roblox Corporation (NYSE:RBLX) is on the run again. After plummeting from a high of $141.60 to a low of $21.65, the gaming stock appears to have bottomed out. It’s also starting to pivot higher from oversold relative strength, moving average convergence divergence, and Williams %R. Even better, the stock is shrugging off its latest earnings loss of 27 cents a share, which was wider than expected. In addition, bookings came in at $631.2 million, which was down 3% year-over-year, as its net loss grew to $160.2 million, which was well over expectations for $68 million.
However, despite that news, the stock is up about 20%. All after the company’s Chief Executive Officer (CEO) David Baszucki said April bookings were turning around. In fact, he said, “March was a very difficult compare. We were all locked down a year ago. […] We’re happy that in April, we’ve seen that start to turn around. We think longer term, we’ll see booking start to catch up with user growth,” as quoted by CNBC.
Roblox is Exposed to a Potential $800 Billion Market
We also have to consider that RBLX is exposed to a potential $800 billion metaverse market by 2028, as noted by Bloomberg Intelligence. Emergen Research says the industry could be worth $1.6 trillion by 2030. In addition, Matthew Ball, CEO of Venture Capital firm Epyllion says it could be a $10 trillion to $30 trillion market. In short, the metaverse could hold massive potential for companies like Roblox.
Analysts still like the stock, too. Stifel analyst Drew Crum, for example, has a “buy” rating on the stock with a price target of $53, as noted by Barron’s. While he noted that first-quarter results were worse than expected, April bookings appear to be better. “With this update, the company seemed to convey a more urgent approach to improving monetization,” he added.
While analysts, like Benchmark’s Mike Hickey just lowered his price target from $45 to $21 with a “sell” rating, I’m not too concerned. Most of the negativity has been priced into the stock. With patience and hopes for better bookings, I’d like to see RBLX back to least $50 in the near-term.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.