Banking giant Bank of America says Roblox has “young tech giant” potential because it “appears to have the only fully fledged metaverse product on the market,” in an article published Monday.
With a “Buy” rating and a $84 price target, the bank has reinstated coverage of the company with the potential for 26% growth from Friday’s close.
The bank cited Roblox’s large and growing user base, 3 million creators, and more than 3,000 paid developers as one of the platform’s advantages over competitors. In the metaverse category, which “is now like social media at its dawn,” the note said, that strong and growing community could solidify its leadership.
“Eventually, social media may be subsumed by the metaverse category.
As a result of Roblox’s potential to eventually encompass more than what investors today can imagine (including revenue streams from advertising and e-commerce), “According to BofA.
Roblox Soar 26% Its Metaverse
Because it “supports a faster than expected product release cadence,” according to BofA, Roblox’s growing community and vertically integrated coding language could help sales growth accelerate before Wall Street estimates.
There is a game called Roblox “its own high-performance data centres and CDNs all over the world, it has complete control over its entire technology stack, from coding languages to graphics software to computation itself As a result of Roblox’s ownership of large-scale compute, the company has the freedom to pursue system performance leadership “According to BofA,
However, Roblox’s current stock price of around $68 does not reflect its leadership in the metaverse, and its current undervaluation means the stock could work even in a down market, according to the bank.
Roblox’s stock rose 5% on Monday, but the stock is still 50% below its all-time high, set in 2021.