The market goes through bull and bear cycles, and each provides opportunities for investors. Bull markets are the growth part of the cycle and they occur much more frequently than bear markets.
One thing that’s not typical of bull markets is the ability to buy blue-chip stocks during downturns: Investors must do careful research to find good deals in a bull market. Revolution group (NYSE: RVLV) And Roblox (NYSE:RBLX) are the two top stocks to buy on the dip today. Here’s why.
The future of fashion includes AI
Jennifer Saibil: Revolve has two sister sites, Revolve and the high fashion site FWRD, where it offers high-end fashion designs for the millennial and Gen Z markets. Revolve is entirely digital and has always used artificial intelligence (AI ) across its operations, and its rich trove of data gives it considerable power to offer products it knows its customers want and charge full price for them.
Revolve’s core customers are generally willing to spend the most on high fashion, but they aren’t necessarily wealthy and are now cutting back on spending. Sales declined 1% year-on-year in the fourth quarter of 2023 and 3% for the full year. Net profit was down 53% for the quarter and 52% for the year.
As depressing as it was, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and even net income remained positive.
In the meantime, Revolve is showing resilience. Sales are down slightly, but inventory is down even more, by 5% compared to the previous year. This contributed to the first gross margin increase in six quarters in the fourth quarter. The company is focused on cash flow efficiency and free movement of capital grew 114% year-over-year to $39 million in 2023.
Revolve does what it does best, building relationships with its loyal customers to generate engagement, and continues to add customers. Active customers increased 9% year over year in the fourth quarter and total orders placed increased 3%. Average order value decreased 1% from last year, explaining the decline in sales as loyal customers stay with Revolve but switch to cheaper items under pressure.
The stock is down 72% from 2021 highs. It climbed quickly when sales growth soared and was on the verge of falling when high inflation hit, but it is weathering this difficult period and should reward patient investors who buy today.
Roblox action is ready for a big comeback
Keith Noonan: Roblox was one of the first major players in the metaverse space and remains a clear leader in the category. The company’s platform is home to thousands of unique games and social experiences. Users can also create their own content on the platform.
By spending real money to unlock global currency, creators can create their own games and experiences for other users to enjoy. If this content ends up generating significant engagement from other users, creators can actually earn substantial amounts of real money.
For example, Roblox paid $221.8 million to creators on…
