More experiences are likely to translate into more engagement and more users. At the end of the day, Roblox is a low-cost entertainment for its many youthful users, who could spend more time on the platform as gaming budgets feel the pinch.įurther, Roblox is investing heavily in its content creators. User growth and engagement could easily continue to improve through a recession year. Still, I do think there's a good chance that bookings growth could return to the high teens once these tough times inevitably become better. As a recession weighs on consumer spending, bookings could easily fluctuate wildly in the new year. The company now expects bookings growth to lie in the mid-teens in 2023, down from original expectations calling for high-teens growth.

In the meantime, Roblox faces challenges as we enter a likely recession year. True innovators could begin the recovery process, while the non-innovative bubbles could continue to drag their feet until their debt burdens and cash bleed become too great to handle. With inflation showing signs of calming and the bond market pointing to fewer oversized rate hikes moving forward, the worst may already be in the rear-view mirror for ARK-like innovation stocks. With that, its stock could be quicker to recover than other fallen hyper-growth plays. In my view, Roblox stock looks like one of the babies thrown out with the bathwater in the tech scene.

Roblox is likely one of the companies that will live to see better days. As investors move beyond rate hikes, we could see a divorce between the true innovators and the firms that may be on their way out. Right now, there seems to be a bit of support for the group. I find Cathie Wood's ARK line of funds to be a good gauge of how the broader basket of unprofitable innovation stocks is doing. The negative momentum has mostly subsided in the speculative tech scene. Roblox: A True Innovator Dragged Down with the Market The firm still has its foot on the gas, which could make it far harder for potential metaverse competitors to replicate Roblox's success. Recession or not, Roblox isn't ready to slow down on the innovation front either. Still, Roblox has a magnificent product and many arenas that can improve its profitability prospects. It's hard to catch a bottom in tech stocks that have crumbled so quickly.

Roblox symbol stock