CNBC’s Jim Cramer endorsed on Monday the purchase of shares in Roblox, the online gaming company that began publicly traded earlier this month.
“You have my blessing to take a position at Roblox now, right here, although I would, of course, on a much lower level, but this is the real deal,” said the host of “Mad Money”.
Roblox closed Monday at $ 70 a share, up 8.5% since listing on the New York Stock Exchange almost two weeks ago. The San Mateo, Calif.-Based company, founded in 2004 by Erik Cassel and David Baszucki, is valued at more than $ 38 billion.
“I have to say that I really like this business model,” said Cramer.
The platform is especially popular with younger generations, who come to the site to build, share and play video games. Roblox said that daily active users grew 85% in 2020 to 32.6 million, up from the 47% growth seen in 2019. The number of paying users has more than doubled to around 490,000.
Roblox raised $ 923.9 million last year, representing an 82% increase from the $ 508.4 million recorded in 2019.
“The economy of staying at home has allowed them to explode, but from now on I am betting that they can maintain much of that momentum behind the wheel,” said Cramer.
Given his underwriting service, Cramer argued that the shares should be judged based on the reserve price. He pointed out that Wall Street analysts are forecasting $ 2.71 billion in orders next year, meaning that the shares are being traded for about 17 times 2022 orders.
“Very expensive, but still in line with something like Snap and much cheaper than Unity Software, perhaps the closest comparison,” he said.
Cramer warned that stocks could suffer some volatility this year, as the economy reopens fully and people reduce the time they spend at home and in digital spaces.
“If it keeps going up, however, I wouldn’t pay more than $ 83.50 for this one, which is about 20 times next year’s bookings, at least not until we have more visibility into how they see the rest of the year. unfolding. ” he said.
“That said, this is a good one. I think it is worth a possible storm and I recommend buying some here,” he continued, “So you could buy more on the way down, but only if you share my belief.”