5 Best Buy-the-Dip Growth Stocks to Buy Now

4. Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Holders: 40

YTD Share Price Decline as of May 27: 67.88%

Roblox Corporation (NYSE:RBLX) operates an online entertainment platform, allowing web developers to build and manage 3D experiences for users. The stock has declined about 68% year-to-date as of May 27, but the company is positioned as one of the biggest metaverse contenders, which makes it an attractive stock to buy on the dip. 

In the first quarter of 2022, the company reported that average daily active users (DAUs) were 54.1 million, an increase of 28% year over year. Similarly, hours engaged on the platform were 11.8 billion, reflecting an increase of 22% from the prior-year quarter. However, Roblox Corporation (NYSE:RBLX) missed Street estimates on earnings per share and revenue in Q1 2022. 

On May 17, Daiwa analyst Jonathan Kees kept an Outperform rating on Roblox Corporation (NYSE:RBLX) but lowered the price target on the shares to $38 from $56. Roblox Corporation (NYSE:RBLX) stressed on a return to seasonality, increasingly normalized growth moving ahead, and bookings growth in the the second half of 2022, all of which “is good news given that investors had uncertainty about timing of the bookings rebound and the reopening trajectory”, the analyst told investors in a research note. However, he slashed price estimates as he forecasts higher company spending ahead.

According to the records kept by Insider Monkey, Roblox Corporation (NYSE:RBLX) was found in 40 public hedge fund portfolios at the end of March 2022, down from 61 funds in the last quarter. Philippe Laffont’s Coatue Management is one of the leading shareholders of the company, with 4.7 million shares worth $221.60 million. 

Here is what Tao Value has to say about Roblox Corporation (NYSE:RBLX) in its Q4 2021 investor letter:

“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On the business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in the virtual world. Apple in its iOS 14.5 rolled out an impactful change for the digital advertising landscape by requiring all apps to ask users to “opt in”.