This Overlooked Company Is Soaring, and Will Likely Continue Higher

Money follows eyeballs. That’s been true since the age of the newspaper. In the digital age, applications and platforms that can get users to spend time will attract advertisers and find ways to profit.

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  • Of course, tastes can change over time. And what looks like a poor investment opportunity may change into a great one as rising users and more eyeballs on a tech platform create an opportunity.

    One surprising winner could be Roblox (RBLX). Best known as a gaming platform designed for all ages, the platform may be undervalued relative to its potential for delivering advertising.

    That’s why one analyst sees shares as capable of moving higher, even after the stock has nearly doubled from its October low.

    While Roblox isn’t profitable yet, revenues are on the rise, up nearly 38 percent over the past year. Plus, the company has over $2 billion in cash on the balance sheet.

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  • Action to take: Investors may like shares here. The trade would be a contrarian one, but if Roblox can increase its advertising revenue, the company should be valued far higher.

    And if it stays near current prices, it could become an acquisition target for a mega-tech company.

    For traders, shares are likely to keep trending higher in the next few months.

    The March 2024 $45 calls, last going for about $3.60, could move in-the-money in the coming months if the current rally stays strong. That would likely lead to high-double-digit gains or better.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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