Today, a number of app-based businesses are seeing impressive gains. For investors in Roblox (NASDAQ:RBLX), this is certainly the case. Currently, shares of RBLX stock are up more than 6% at the time of writing.
This move is a continuation of some pretty strong momentum for Roblox in recent weeks. A stock that’s dipped significantly since May, RBLX stock is starting to see some solid footing. Investors appear to like this company’s growth profile within the digital gaming space. Indeed, as investors seek higher-quality growth, Roblox is a name that continues to pop up.
Today, there’s a sector-specific catalyst driving RBLX stock higher. Let’s dive into what investors are watching with this growth stock today.
Lower App Store Fees Driving RBLX Stock Higher
High growth potential is certainly great. For Roblox, investors know what they’re getting in this regard.
However, the bottom line margins Roblox is able to produce have been more tricky to project. As an app-based business, Roblox pays significant commissions to App Store providers such as Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG, NASDAQ:GOOGL) for the right to list their games.
Thus, today’s news that Google has slashed its service fees on its App Store is a big catalyst for RBLX stock. Lower fees means higher margins for Roblox. Given how dependent Roblox’s business model is on the fee structure dictated by these mega-cap technology giants, these recent cuts provide a nice catalyst for earnings growth in the future.
Roblox is a company that’s not yet profitable. However, investors appear to be pricing in higher margins and future cash-flow growth as a result of this announcement. Accordingly, RBLX stock appears to be one with solid momentum right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.