Things have been a bit rough for video game stock Roblox (NASDAQ:RBLX) lately. First, it took a few hits over allegations of gambling on the platform. Now, it’s fending off accusations that it’s proving to be the direct beneficiary of child labor. Roblox is fighting back, and investors are pleased, as shares were up over 2.5% in the final minutes of Friday’s session.
The head of Roblox Studios, Stefano Corazza, noted that the play-to-earn features in Roblox are an opportunity for young game creators to actually profit from their labors. Corazza even went so far as to declare the opportunity in question a “gift” for the youngsters out there. Naturally, Roblox does take a share of the profits since it does the hosting and everything, but surely this doesn’t put Roblox in the same category as people who, say, send children into coal mines, right? That is, of course, a highly controversial topic in and of itself, and certainly, the two sides are unlikely to see eye-to-eye.
A Little Less Than Noble
There’s also another point to consider about Roblox: its buy and sell rates for its in-game currency, Robux. While Robux are sold by Roblox at $12.50 per thousand, they’re purchased for $3.50. And it doesn’t help matters much that those very same Robux can be used elsewhere, including online gambling sites like Studs and RBLXWild.
Thus, those precocious programmers can take their hard-earned geetus and, instead of elevating themselves out of poverty, effectively gamble it away despite being underage the whole time. That’s currently the topic of a lawsuit being leveled at Roblox in California.
Is Roblox Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RBLX stock based on 12 Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After an 18.1% loss in its share price over the past year, the average RBLX price target of $49.72 per share implies 31.31% upside potential.
