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What happened
Roblox (NYSE: RBLX) had a fantastic month in October 2022. The stock gained 24.8% last month, according to data from S&P Global Market Intelligence. Roblox’s surge hinged on two particularly epic days.
So what
First, Roblox stock jumped 19.8% on Oct. 17 thanks to an impressive report of key metrics for September. The number of daily active users (DAUs) increased by 23% year over year to 57.8 million names, hours of engagement rose 16%, and estimated revenues for that month were comparable to the year-ago reading.
The next week, Roblox shares tagged along as the stock market as a whole had a fantastic day. The S&P 500 index gained 1.6%, and the tech-heavy Nasdaq Composite rose by 2.3%. Investors cheered reports that the Federal Reserve might soon slow down its interest rate increases. High-octane growth stocks have taken bigger hits from the economy’s sputtering engines than other investment types, and Roblox is a poster child for growth-oriented investments. As a result, Roblox stubs boosted their market value by 9.2% on October 25.
Now what
October gave Roblox investors a ray of sunshine in a pretty dark year. The S&P 500 and Nasdaq Composite indexes are down by double-digit percentages in 2022, but Roblox is diving far deeper.
In the long run, Roblox needs to make the most of its lightweight operating model, where users do much of the actual game development while Roblox focuses on the underlying platform. That plan gives this company an advantage over more hands-on game developers, who invest a smaller portion of their gross profits into future game development.
Closer at hand, Roblox will publish its full third-quarter results before the opening bell on Wednesday, Nov. 9. This report will show whether the potent September metrics were a fleeting fluke or a sustainable uptrend.
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roblox Corporation. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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