How so? Roblox ended March trading at 25 times the roughly $1.5 billion in revenue it projects for 2021. With slowing growth, it seems particularly difficult to justify Roblox’s lofty valuation.

In the first quarter 2021, that time declined 30% to 70 minutes - “consistent with declines in time spent for other popular mobile games,” according to Investor’s Business Daily. daily active user spent 100 minutes a day on Roblox during the peak months of 2020. According to Sensor Tower, the average U.S. People are spending less time on Roblox this year. Doug Clinton, managing partner at investment and research firm Loup Ventures, told the Journal, “I don’t think the growth we’ll see this year will be reflective of the long-term potential of the business.Over the next two or years, bookings could grow by 20% to 30%.” This will mean slower growth for Roblox in the future. As more people receive Covid-19 vaccines, schools will increasingly open up to in-person learning. To its credit, Roblox’s games have helped occupy the time of youngsters who were mostly learning at home last year. Yet there are three concerns that I find troubling - including flaws in these two apparent reasons for optimism. Roblox has a longer-term growth trajectory in mind - expecting to add new groups of customers - older players - from new geographies - particularly those in China - as it updates its technologies to enable its eight million hobbyist game developers to produce higher quality games, according to the Wall Street Journal. Roblox forecasts 2021 revenue growth in the 56% to 64% range while its daily user count is expected to increase 10% to 36.4 million, “helped by attracting users older than its primarily Generation Z base and from regions such as western Europe and East Asia,” notes the Journal. Here are two reasons suggesting Roblox’s prospects are bright:

Should i buy roblox stock