• Roblox (RBLX) demonstrates strong technical momentum and set a new 52-week high on Friday, June 6.
• RBLX has a 100% technical “Buy” signal via Barchart.
• Shares are up nearly 170% in the past year. 

Today’s Featured Stock:

Valued at $63.4 billion, Roblox (RBLX) develops and operates an online entertainment platform. It offers Roblox Client, an application that allows users to explore 3D digital worlds; and Roblox Studio, a toolset which allows developers and creators to build, publish and operate 3D experiences and other content. The company also provides Roblox Cloud, a solution which provides services and infrastructure to power the human co-experience platform. 

What I’m Watching:

Author’s Note: I bought my grandson a gaming computer for his birthday and his mother tells me he has been on Roblox since he opened the box. So, when it came up on my screener, I took a second look.

I found today’s Chart of the Day by using Barchart’s powerful screening functions. I sorted for stocks with the highest technical buy signals, superior current momentum in both strength and direction, and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. RBLX checks those boxes. Since the Trend Seeker signaled a buy on April 24, the stock has gained 45.84%.

RBLX Price vs. Daily Moving Averages:

Barchart Technical Indicators for Roblox:

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Roblox shares hit a new 52-week high on June 6, touching $96.28 in intraday trading. Shares have since pulled back slightly, trading now near $94.30. 

• Roblox has a 100% technical “Buy” signal.
• The stock closed at $93.42 on June 9, above its 50-day moving average of $72.14.
• RBLX has a Weighted Alpha of +174.13.
• The stock has gained 167.3% over the past year.
• RBLX has its Trend Seeker “Buy” signal intact.
• Roblox is trading above its 20, 50 and 100-day moving averages.
• The stock has made 14 new highs and gained 30% in the last month.
• Relative Strength Index is at 83.7%.
• The technical support level is $94.93.

Follow the Fundamentals:

• $63.4 billion market cap.
• Revenue is projected to grow 23.23% this year and another 20.26% next year.
• Earnings are estimated to increase 2.62% this year and an additional 16.56% next year.

Analyst and Investor Sentiment on Roblox:

I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping a stock, it’s hard to make money swimming against the tide.

It looks like not only Wall Street analysts, but also many of the popular investing advisory services, are moderately bullish on this stock.

• Wall Street analysts tracked by Barchart issued 15 “Strong Buy,” one “Moderate Buy,” six “Hold” and two “Sell” opinions on the stock.
• Value Line gives the stock its lowest rating and comments: “The company remains focused on expanding its share of the global gaming market. The goal is to capture 10% of the market, which is an impressive leap from its current position of 2.4%. To reach the higher standing, Roblox intends to make several technology investments to improve the quality of the platform.”
• CFRA’s MarketScope rates the stock a “Buy” and comments: “Risks to our opinion include intense competition in the VR/3D experiences segment from larger players like Apple and Unity Software, which could impact market share growth.”
• MorningStar thinks the stock is 112% overvalued but comments: “We believe Roblox benefits from a narrow moat that is underpinned by a network effect, so we expect healthy user growth to continue, but we expect the rate to slow in developed markets especially. We question the size of the audience to which Roblox’s platform is attractive.”
• 63,080 investors monitor the stock on Seeking Alpha, which rates the stock a “Hold.”

The Bottom Line:

Analyst sentiment is moderately bullish on Roblox, although some caution on its valuation amid competition from larger players like Apple (AAPL) and Unity (U).

While RBLX has momentum and investor support, I emphasize strict risk management as the stock remains volatile and speculative.

Additional disclosure: The Barchart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.