Roblox stock continued its post-earnings climb on Monday thanks to a traffic surge from the hit new online game "Grow a Garden."
The two-month old game has been a huge success for the company, reportedly reaching a peak of 8.9 million people playing at the same time.
"Grow a Garden" lets players maintain virtual gardens by planting seeds, growing crops and selling the harvest. The digital plants even grow when players are offline.
On the stock market today, Roblox stock rose 3.4% to close at 89.95. Earlier in the session, it climbed as high as 90, its highest level since January 2022.
On May 13, Roblox stock broke out of a cup-with-handle base at a buy point of 74.24, according to IBD MarketSurge charts. Roblox is technically trading in the 20%-to-25% profit-taking zone, based on IBD trading guidelines.
However, because Roblox hit that zone within three weeks of its breakout, it qualifies for the eight-week hold rule. But given the market volatility, even with the eight-week hold rule in place, a key IBD sell rule is to not allow any good stock to make a full round trip of double-digit gains.
Roblox operates a 3D virtual space for people to socialize and play games. Its online experiences range from gaming and hangouts to concerts, sports, fashion shows, education and entertainment.
The online gaming and social platform delivered a beat-and-raise first-quarter earnings report on May 1.
Roblox reported 97.8 million average daily active users, up 26% year over year, in the first quarter. Analysts had expected 93.1 million.
Roblox Stock Is On Two IBD Lists
Late Thursday, BMO Capital Markets analyst Brian Pitz reiterated his outperform rating on Roblox stock and raised his price target to 95 from 82.
"We believe 'Grow a Garden,' a new hit game, is driving the strong quarter-to-date trends," Pitz said in a client note. "The game has broken multiple engagement records since its launch on March 25."
Pitz raised his estimates for Roblox bookings because of the success of "Grow a Garden."
Roblox stock is on two IBD lists: IBD 50 and Tech Leaders.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
