Sarah Travers
For those keeping an eye on the horizon for the next bull market, there’s a glimmer of hope in the form of two tech stocks: Roku and Roblox. Despite encountering some recent obstacles, these companies are quietly building promising prospects for value-seeking investors. Let’s take a deeper look.
Roku – A Streaming Hidden Gem
Roku (ROKU) is quietly revolutionizing the entertainment landscape, carving out a unique niche in the streaming world. With an impressive 51% share of the global connected TV advertising market and 49% of North American streaming device market share, Roku stands as a dominant force. As cord-cutting continues to gain momentum, this space holds vast untapped potential.
Although Roku faced adversity in recent years, witnessing its stock price plunge by as much as 82% from its 2021 peak, the company displayed resilience. Roku’s management made strategic choices to maintain price stability amidst inflation, resulting in a 34% surge in user numbers, from 56.4 million to 75.8 million users within just two years. This user-centric approach underscores Roku’s commitment to sustainable long-term growth.
Despite recent hurdles, Roku remains a high-growth prospect with untapped opportunities. The forthcoming bull market is anticipated to bolster Roku’s global expansion endeavors while reinvigorating the digital advertising sector.
Roblox – A Gateway to Creativity and Prosperity
Roblox (RBLX) operates a dynamic platform that empowers users to partake in an array of games and social interactions, all while offering opportunities to create and monetize content. Developers on the platform earned approximately $590 million in the first three quarters of the current year, marking a significant 33.5% year-over-year increase.
Roblox’s incentive structure consistently drives the addition of fresh content to the platform, ensuring a continuous stream of games and experiences. This approach has enabled the company to attract a record-breaking 70.2 million average daily active users, marking a 20% increase compared to the previous year. With an average booking per daily user at $11.96, Roblox has achieved impressive levels of monetization.
In the third quarter, Roblox reported revenue of $713.2 million, reflecting a substantial 38% year-over-year increase, underscoring its resilience and growth potential. Furthermore, the company has only begun to scratch the surface in terms of opportunities in digital advertising and generative artificial intelligence.
Seizing the Promise of These Opportunities
Despite recent challenges, both Roku and Roblox have emerged as strong contenders for investors seeking hidden gems in today’s market. Roku’s dominance in the streaming industry and its dedication to user satisfaction make it an enticing prospect, while Roblox’s creative platform and remarkable growth in user numbers and revenue paint a promising picture.
With both stocks currently trading at discounted levels compared to their highs, investors have a prime opportunity to position themselves for potential gains as the next bull market takes shape. These companies exemplify value investments that hold the potential to yield significant returns in the years ahead, making them noteworthy additions to the portfolios of forward-thinking investors.
