CNN  —  Many adults heard the phrase “Robux” for the first time last holiday season when the virtual currency of gaming platform Roblox landed on the top of most wish lists. Roblox – with a stunning 70 million users – has attracted a devoted fan base, especially among teens, with its wide offering of games, from simulations and adventure games to ones you design yourself or with friends. This Thursday before the bell, Roblox will report its first quarter earnings. And it will have to prove to Wall Street there’s more growth up ahead. In its fourth quarter of 2023, Roblox revenue was $750 million, up 30% year-over-year – but had a net loss of $323.7 million. Investors have cooled. The stock has shuffled between $25 and $45 for many months after hitting a peak, just above $130 in 2021, the year the company went public. “The company has faced high operational costs and it needs to sustain rapid growth at the same time,” said Matilda Beinat, an AR/VR analyst at tech intelligence firm ABI Research. “Investors have wondered if that can be feasible.” Still analysts and investors remain moderately optimistic. Here are three reasons why. Gaming Center gift card display at Costco store featuring Roblox gift cards. Lindsey Nicholson/UCG/Getty Images/File New revenue streams Roblox has evolved since its 2006 launch and so has its growth strategy. The platform allows users to both play user-created games and create their own games and it also blends elements of a social media network, so people can make friends and talk to developers as they explore virtual worlds. Last year, its CEO David Baszucki shared visions of Roblox becoming a place where people can date and form “real-life relationships” within the next five years. In February, the company said 19.7 million new “friendships” are formed every day on the site. The company’s vision has long been for Roblox to be everywhere, and in many ways, it’s succeeding. The platform’s active daily users are using the platform for an average of 2.5 hours a day – and those numbers continue to grow. About half of US youth, ages 12 to 17, use Roblox in the US monthly; and it continues to experience growth overseas, especially in Asia. Its biggest hits include Adopt me! (a pet simulator), Brookhaven RP (a functioning virtual town) and Tower of Hell. Although many of the games are geared toward teens, the company seeks to grow and monetize the number of older players. Just last week, the company announced it will show immersive video ads to players over the age of 13. Roblox’s stock price has moved up a bit since that announcement. A new developer subscription offer allows developers to create monetary subscriptions to unlock certain experiences, a feature some analysts expect could help the platform grow even more among other generations. Brand interest, and risks Brands have growing interest in Roblox, too. The company said it experienced the strongest brand engagements on its platforms during the fourth quarter of 2023, with more than 300 brand activations on the site including those from Ralph Lauren, Nike, Crocs and Lego. Walmart has even joined the Roblox metaverse, adding an experience that allows users to buy physical items and receive them in the mail. Although more brand involvement will likely continue this year, the company will need to ensure users don’t suffer from ad fatigue, according to Mike Proulx, a research director at market research firm Forrester. “As the company doubles down on advertising as a way to lure in more brands, it needs to balance what might be seen as ‘easy revenue’ with user experience,” he said. “Too many ads risk user backlash. Brands that want to effectively reach Roblox’s young user base should prioritize creating a value exchange. Programmatic ads alone won’t cut it,” Proulx said. A monitor displays Roblox Corp. signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Friday, Feb. 9, 2024. Michael Nagle/Bloomberg/Getty Images/File Good timing Roblox’s growth reflects budding interest in two buzzy industries: artificial intelligence and extended reality (XR), a term that covers virtual reality, augmented reality and mixed reality. In February, Roblox introduced an AI chatbot that allows users to communicate with each other in real time, regardless of what language they speak. The tool works in 16 languages. The company also previously shared its vision for the expansion of AI on the platform with tools that will “enable every user to become a creator.” At the same time, major tech companies continue to invest in XR, with increased interest due in part to the launch of Apple’s Vision Pro headset. The metaverse is attracting renewed interest. “We can already start to see the performance of the company going up with these new strategy implementations, and I do believe that with the right advertising and the right timings, Roblox will soon be the communication and collaboration platform it is striving to be,” Beinat said. Facing rivals But Roblox also faces challenges from its chief competitor, Epic Games’ Fortnite, and that platform’s Unreal Editor for Fortnite (UEFN), a tool that enables creators to build experiences and publish them directly into Fortnite. “They’re definitely pushing hard to eat Roblox’s lunch, even though the Fortnite player base tends to be older,” said Lewis Ward, director of gaming at market research firm IDC. Epic has also been taking steps to creep in on Roblox’s core user base. In February, the publisher announced it is teaming up with Disney to create open games and entertainment connected to Fortnite, offering users the ability to play, watch, shop and engage with content and characters from Disney, Pixar, Marvel, Star Wars, Avatar and other franchises. Like Fortnite, Roblox is also moving ahead with a“payout to creators” business model. Last year, the company said it will let creators who sell assets and tools for other creators on its Creator Marketplace keep all of the revenue they earn. “It’s clear that [Roblox] intends to go after younger gamers in 2024 and 2025,” Ward said. “I think this aspect of gaming will keep growing over time and Roblox is well-positioned to benefit from this ‘gig economy’ trend,” Ward added.