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3 Metaverse Stocks to Keep a Tab on in October

Tirthankar Chakraborty
·4 min read

Metaverse, which means a virtual world reachable to an umpteen number of people for communications, business, and more, might sound futuristic. But truth be told, much of our lives are now already controlled online.

In fact, initiatives to mix the digital world with reality using the Internet, and the ever-growing importance of Virtual Reality (VR), Augmented Reality and Mixed Reality are expected to help the metaverse market grow by leaps and bounds in a decade or so.

The metaverse market size, in reality, is estimated to reach $824.53 billion by 2030 from $27.21 billion in 2020. The market is expected to witness a CAGR of 39.1% from 2022 to 2030, according to Verified Market Research, citing a PRNewswire article.

Lest we forget, the increase in demand for remote work amid the coronavirus outbreak worldwide has already helped the metaverse market to grow. At the same time, the growing acceptance of non-fungible tokens and cryptocurrencies has positively impacted this space.

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Astute investors should, thus, keep an eye on companies that are positioned to benefit from this growing metaverse market that is at the moment in its early stage.

Anyhow, the broader market isn’t doing good, with the major indexes tumbling as the Fed turns hawkish to tame stubbornly high inflation. Thus, the growing metaverse market amid such a bloodbath in the stock market is surely encouraging news for investors.

Some of the prominent companies whose growth will be propelled by metaverse are Microsoft Corporation MSFT, Roblox Corporation RBLX and Matterport, Inc. MTTR. These companies currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Microsoft’s business is somehow closely linked to the metaverse. When it comes to metaverse-related hardware, Microsoft’s AR headset, HoloLens 1 comes in the limelight. In fact, MSFT has already launched the second generation of HoloLens, which is now being used by several companies to save on costs and time, to say the least.

Further, Microsoft aims to be the pioneer in metaverse-based games. As a result, the company has already declared its goal to acquire Activision Blizzard (ATVI) this year, a foremost gaming organization.

The Zacks Consensus Estimate for Microsoft’s next-year earnings has moved up 0.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 9.6%. MSFT shares have outperformed the Zacks Computer - Software industry over the past two-year period (+10.7% versus -4.2%).

Roblox is known for providing an online entertainment platform, which is actually an early-stage form of a metaverse platform. In fact, prominent artists like Lil Nas X and Tai Verdes have already conducted concerts on Roblox’s online platform.

To top it, RBLX already boasts of its own digital currency, Robux, which has more than 50 million daily active users.

The Zacks Consensus Estimate for its current-quarter earnings has moved up 4.4% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 5.6%. RBLX shares have outperformed the Zacks Gaming industry over the past three-month period (+2.1% versus -0.6%).

Matterport aims in merging both the digital and physical worlds. It helps companies to create “digital twins” of real-world locations, houses and complexes, which can be accessed through VR headsets and web browsers to name a few.

Having a market cap of about $1.076 billion, Matterport is one of the smallest metaverse stocks to watch for. After all, its shift from more of a hardware business to a subscription-based software business should give MTTR more potential to scale upward in the long term.

The Zacks Consensus Estimate for the company’s current-year earnings has moved up 2% over the past 60 days. The company’s expected earnings growth rate for the next year is 24.5%. MTTR shares have outperformed the Zacks Technology Services industry over the past three-month period (+4.7% versus -10.0%).


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Roblox Corporation (RBLX) : Free Stock Analysis Report
 
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