gaming platform roblox (NYSE: RBLX) This is an amazing growth story in recent years. There are over 71 million daily active users (DAU) and approximately 16 million paid members. Roblox users spent 60 a billion I've spent many hours using the platform over the last year, and the company has done a great job of monetizing that experience.

Despite its impressive growth, Roblox may still be in the early stages of its growth story. Management has big plans for this business, and it could benefit greatly from one of the most promising technology trends on the market today.

Why can Roblox be a once-in-a-generation opportunity?

Metaverse technology is still in its relatively early stages. The global Metaverse industry is just beginning to gain serious traction. According to research firm Markets & Markets, the global metaverse market will be worth approximately $84 billion in 2023, and is expected to rapidly grow to more than $1.3 trillion by 2023.

Roblox has a huge first-mover advantage. This is probably the closest thing to a true Metaverse gaming experience in the industry today. And as wearable technology evolves and its adoption continues to grow, Roblox should have incredible tailwinds.

Despite its large size, Roblox continues to grow rapidly. The company's revenue increased 30% year-over-year in the fourth quarter, and margins continue to trend in the right direction. Operating cash flow increased 20% for the year, and although we are not yet profitable on a net income basis, we are beginning to see a clear path to profitability.

Great long-term potential

Business owners have big goals for their business. 71.5 million DAU may sound like a lot, and it is, but Roblox leaders believe they can scale the platform to 1 billion in the long run. The platform will continue to launch on new devices such as Roblox. just It became available on Sony PlayStation and Meta Quest in Q4. This growth could help expand the user base in the short term.

Not only does Roblox plan to grow its user base by about 14 times from current levels, but there are other factors that could drive sales and revenue growth.

First, Roblox does a great job of finding and implementing new ways to monetize its users. So far, most of Roblox's revenue has come from selling Robux, a virtual currency for in-game purchases, but it has also started selling ads on the platform, making it a fast-growing, high-margin revenue stream. is producing. The company is just beginning to roll out video ads, but as the platform and its associated technology evolve, immersive advertising presents a huge opportunity. Additionally, Roblox plans to launch a feature that allows content creators to sell. physically Selling products through the platform can create a whole new revenue stream.

conclusion

Roblox has established a strong track record of growth and is starting to offer investors a clear path to profitability. While the results so far are very impressive, we may only be scratching the surface of Roblox's long-term potential. As more immersive devices are released by manufacturers, apple and meta platformamong other things, Roblox's user base and monetization continue to improve, and Roblox could be a big winner.

Of course, there are a lot of things that need to go right for Roblox to reach its goal of 1 billion users and become the dominant experience platform. This is not considered a low volatility or low risk investment. But if the company can execute on its growth strategy, it could create generational wealth for patient investors.

Should you invest $1,000 in Roblox right now?

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Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. Matt Frankel has a position on his Roblox. The Motley Fool has positions in and recommends Apple, Meta Platforms, and Roblox. The Motley Fool has a disclosure policy.

First edition of “Once in a Generation Investment Opportunity: 1 Incredible Technology Stock to Buy Now” Publisher: The Motley Fool



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