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Roblox stock dropped– Roblox Corporation (NYSE: RBLX) shares dropped 7.8% on Thursday. The second day in a row of prices fell since the company reported blockbuster sales growth in its first earnings report post-IPO.

Roblox Stock Dropped -What more happened?

Indicators of decline include competition and government regulations.

Video game developer Ubisoft is shifting away from relying solely on high-priced “AAA releases” and offering a “high-quality line-up that is increasingly diverse,” including new high-end free-to-play titles.

Roblox’s specialty is free-to-play gaming (plus in-game purchases). In this market, Roblox’s growth prospects might be questioned due to competition from Ubisoft.

The same day, an analyst at investment bank Stifel Nicolaus raised its price target for Roblox in a midday report. But warned in April of “decelerating” growth that it might continue through 2H as the business laps difficult comps, which may also be hurting the stock.

ROBLOX Latest Promo Codes List

Even if Roblox’s growth rate is decelerating, it’s got a long way to go before anyone could call it “slow.” In Q1 2021, the company says it grew revenues 140% and bookings (i.e. sales of Roblox stock dropped) by 161% — which actually might imply that sales growth is still accelerating at this point.

Moreover, it’s worth pointing out that on the company’s cash flow statement, Roblox translated $387 million in sales. It was into $142.2 million in positive free cash flow (FCF) in Q1. In other words, Roblox’s FCF margin was 36.7% — down from about 50% at their IPO. But significantly better than the 21.4% they booked a year ago in Q1 2020.

With sales growth still solid and free cash flow margins arguably improving, Roblox investors might want to look at today’s sell-off as a buying opportunity.

Stocks that are better than Roblox Corporation

The Gardner brothers are renowned investors, so if they have a stock tip, it’s worth listening to. Since the Motley Fool Stock Advisor newsletter was first there in 2000, the market has tripled.*

According to David and Tom, Roblox Corporation is not among the ten best stocks for investors to buy right now. The truth is, these stocks are even better buys. 

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