Whenever a stock trades in a narrow range, it creates a buying opportunity for investors willing to bet on a break-out. That happened for two stocks in the last week. Roblox (NYSE:RBLX), a gaming platform, and The Trade Desk (NASDAQ:TTD), an advertising platform.
Roblox rose by 30% on Nov. 9 at market open when it posted strong bookings. Easing COVID-19 pandemic restrictions failed to hurt its growth in international markets. October data suggests that user growth will continue, engagement will rise, and monetization rates will outperform market expectations.
Q4 is usually a trough for Roblox. This time could be different. Roblox has strong user base growth momentum. It may disprove the most bullish analysts as the stock heads to at least $120.
TTD stock rallied like RBLX when it posted Q3 results. Revenue grew by 39% Y/Y. It benefited from growth across all channels. The connected TV business benefited from the permanent shift of viewers from traditional TV cable to new digital. Streaming services are also enjoying a higher audience count. Advertisers who set campaigns for the first time are embracing the new medium.
TTD set a Q4 revenue forecast of $388 million. Adjusted EBITDA is around $175 million. The strong margins set TTD from old media. Investors should be wary of stocks like Fox (NASDAQ:FOX), ViacomCBS (NASDAQ:VIAC), and AT&T (NYSE:T) while TTD’s ad platform continues to grow.