Roblox is seeing a summertime slump, is it an opportunity for investors?

Is it game over for Roblox Corp (NYSE:RBLX) or is the tween gaming phenomena-come-Reddit-meme stock set to respawn into a fresh rally? Roblox earlier this week saw its price slump more than 10% after revealing disappointing numbers on Tuesday. The stock floated in March off the back of a game industry boom as kids were kept indoors through the Covid-19 lockdowns. It came to market without an IPO as it went with a direct listing, which basically meant that existing shares began trading without a new issue. Roblox like Fortnite (another popular game among a similar age bracket) is free to install and play but leverages in-game monetisation through microtransactions. Roblox impressed with first quarter results in May showing soaring player numbers and revenue. On Tuesday, the group reported a 1% quarter-on-quarter drop in daily active users (DAU), down to 43mln, halting a track record of growth boost by the pandemic. At the same time, the group said that spend per DAU had is set to decline by 2% to 3% year-over-year, to between US$5.02 and US$5.09. Evidently, it was a different story after lockdowns ended in key territories. “With users forced indoors, growth was accelerated in 2020. Now, with parents ushering their kids into the sunshine once more, of course growth will decline. But this does not take away from the massive gains Roblox has made in the past year,” Jamie Adams of MyWallSteet said in a note. “For Roblox bulls, this dip could be seen as a great buying opportunity.” “The video game industry is growing faster than any other media sector, and Roblox is at the forefront of the new trend of social gaming.” Zooming out MyWallSteet noted that on a year-on-year basis the Roblox numbers are much more positive. At 43mln MAUs are up 28% year-on-year whilst total hours gaming totalled 3.2bn across the platform, which is a 9% improvement. Total bookings are up 26% in the quarter, compared to Q2 2020, and similarly revenue is seen 162% above last year’s comparative.