The NFL is stepping into the metaverse, and it is doing so via Roblox (RBLX). Last week the gaming platform announced it is launching NFL Tycoon, a football-inspired videogame, and the first such “experience” game on offer from a sports league on Roblox.
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NFL Tycoon will enable players to fight it out with friends and take on the role of NFL team owners as participants create their own worlds replete with custom stadiums, rosters, and other features.
The latest development follows on from earlier collaborations between the two, starting with 2018’s virtual helmets and culminating with the launch of an NFL-branded merchandise store inside Roblox in 4Q21.
Morgan Stanley’s Brian Nowak sees the Roblox branded experiences as a “key differentiator,” that sets the platform apart from the competition.
“The NFL partnership expansion is important because it is an example of one of the most premium sports brands further endorsing Roblox’s ecosystem, user, engagement, and monetization opportunity,” the analyst opined.
The list of partnerships should also keep on expanding over time, and Nowak highlights several reasons why branded experiences are “key to RBLX’s long-term opportunity.”
For one, adding partnerships across different categories such as retailers, entertainment companies, video game companies, B2B tests and so on, offer a way to “address more consumers and larger buckets of expenditure.” The analyst also sees such experiences gaining “further engagement and adoption.”
These can then lead to additional “digital purchases, heightened secondary trading activity and unique virtual item collecting (NFTs).” Accordingly, there could also be instances of offline e-commerce integration within Roblox. For example, real-life NFL jerseys or merchandise might also become available to purchase on the platform. “These are all key to driving estimate revisions (and the multiple the market will pay), driven by materially higher per hour monetization,” Nowak summed up.
So, great for Roblox and the NFL, but what does it all mean for investors? Nowak reiterated an Overweight (i.e., Buy) rating along with a $115 price target. If Nowak is correct, the stock will generate returns of 57% over the coming year. (To watch Nowak’s track record, click here)
The Street’s average target clocks in slightly lower, yet at $103.89, should still provide upside of 59% in the months ahead. Overall, the analyst consensus rates RBLX stock a Moderate Buy based on 7 Buys, 2 Holds and 1 Sell. (See Roblox stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
