Roblox (RBLX) AI Stock Analysis

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Roblox

(NYSE:RBLX)

Rating:73Outperform

Price Target:

$101.00

▲(10.90%Upside)

Roblox has demonstrated impressive revenue growth and cash flow generation, supported by strong user and creator engagement. However, profitability challenges and valuation concerns slightly offset the positive momentum. The robust technical indicators and positive earnings call sentiment are key strengths, though overbought signals warrant caution.

Positive Factors

Growth Expectations

The core business of Roblox is expected to exceed 20% year-over-year growth through 2027.

Investor Confidence

Roblox has more confidence to invest aggressively for growth over the next 18 months.

Negative Factors

Advertising Revenue

Ad revenues for Roblox won’t be material.

Engagement vs. Bookings

There is an apparent unprecedented divergence between engagement and bookings growth at Roblox Corp.

Roblox (RBLX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$61.01B

Dividend YieldN/A

Average Volume (3M)8.52M

Price to Earnings (P/E)―

Beta (1Y)1.31

Revenue Growth30.24%

EPS Growth27.61%

CountryUS

Employees2,474

SectorCommunication Services

Sector Strength83

IndustryElectronic Gaming & Multimedia

Share Statistics

EPS (TTM)-0.32

Shares Outstanding629,990,660

10 Day Avg. Volume6,650,590

30 Day Avg. Volume8,518,227

Financial Highlights & Ratios

PEG Ratio-7.23

Price to Book (P/B)155.39

Price to Sales (P/S)0.00

P/FCF Ratio55.60

Enterprise Value/Market Cap0.81

Enterprise Value/Revenue3.54

Enterprise Value/Gross Profit16.53

Enterprise Value/Ebitda-17.13

Forecast

1Y Price Target

$78.55

Price Target Upside-13.75% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering22

Roblox Business Overview & Revenue Model

Company DescriptionRoblox Corporation develops and operates an online entertainment platform. The company offers Roblox Studio, a free toolset that allows developers and creators to build, publish, and operate 3D experiences, and other content; Roblox Client, an application that allows users to explore 3D digital world; Roblox Education for learning experiences; and Roblox Cloud, which provides services and infrastructure that power the human co-experience platform. It serves customers in the United States, the United Kingdom, Canada, Europe, China, the Asia-Pacific, and internationally. The company was incorporated in 2004 and is headquartered in San Mateo, California.

How the Company Makes MoneyRoblox primarily generates revenue through the sale of its virtual currency known as Robux, which users purchase with real money. Robux is used to buy in-game items, accessories, and experiences within the Roblox platform. A significant portion of Roblox's revenue also comes from its Developer Exchange Program, where developers can earn real-world currency by creating popular games and experiences that attract more users. Additional revenue streams include advertising partnerships and licensing deals that expand the reach and monetization potential of the platform. Roblox's business model is heavily reliant on user engagement and the continuous influx of new content from its developer community.

Roblox Key Performance Indicators (KPIs)

Any

Total Daily Active Users

Total Daily Active Users
Tracks the number of users actively engaging with the platform each day, reflecting the platform's popularity and user retention capabilities.

Chart InsightsRoblox's Total Daily Active Users have surged, reaching 97.8 million by Q1 2025, a 26% year-on-year increase. This growth is fueled by significant user expansion in regions like Japan and India. The company has exceeded its revenue and bookings guidance, reflecting strong engagement and strategic investments in AI and platform quality. Despite slower growth in Europe and macroeconomic concerns, Roblox's focus on operational efficiency and creator success positions it well for continued expansion, with creator earnings expected to surpass $1 billion this year.

Data provided by:

Main Street Data

Roblox Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 35.82%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance with significant revenue, bookings, and cash flow growth. There was notable expansion in user engagement and creator earnings. Challenges included slower growth in Europe due to regional issues and investor concerns about potential macroeconomic impacts. However, the positive aspects of growth and innovation significantly outweigh the challenges faced.

Q1-2025 Updates

Positive Updates

Record Revenue and Bookings Growth

Q1 2025 revenue was $1.035 billion, up 29% year-on-year, surpassing guidance. Bookings were $1.207 billion, up 31% year-on-year, also ahead of guidance.

Strong Growth in Daily Active Users

Q1 DAUs reached 97.8 million, up 26% year-on-year. Notable regional growth includes Japan at 48% and India at 77%.

Significant Increase in Cash Flow

Cash from operations was $443 million, up 86% year-on-year, and free cash flow was $426 million, up 123%.

Creator Earnings Surge

Developer exchange (DevEx) was up 39% year-on-year, with creators on track to earn over $1 billion this year.

Expansion in Genre and Developer Success

Genres like RPG, sports, and battle saw 69% growth. More developers, including 100 developers earning over $1 million in the past 12 months.

Advancements in AI and Safety

AI-driven moderation has improved efficiency and quality. New AI voice classifier model is open source, contributing to industry-wide safety efforts.

Negative Updates

Slower Growth in Europe

DAUs and hours in Europe grew more slowly due to Turkey being offline, although bookings growth was consistent with other regions.

Concerns About Macro Environment

Investors expressed concern about potential macroeconomic downturns and how they might affect Roblox's performance.

Company Guidance

In the Q1 2025 earnings call, Roblox reported strong performance, surpassing its previous guidance and 2023 Investor Day goals. The company achieved a Q1 revenue of $1.035 billion, marking a 29% year-on-year increase, exceeding the guidance of $990 million to $1.015 billion. Bookings reached $1.207 billion, up 31% year-on-year, and surpassed the guidance range of $1.125 billion to $1.15 billion. Roblox's Daily Active Users (DAUs) were 97.8 million, a 26% increase from the previous year. Engagement hours grew to 21.7 billion, up 30% year-on-year. Cash from operations was $443 million, an 86% increase, while free cash flow rose by 123% to $426 million. Creator earnings (DevEx) increased by 39% to $281 million, contributing to the expectation of over $1 billion in creator earnings for the year. The company highlighted significant growth across various regions and age demographics, with notable DAU increases in Japan (48%) and India (77%). Additionally, Roblox emphasized its focus on operational efficiency and strategic investments, particularly in AI-driven moderation and search and discovery algorithms, to enhance platform quality and support creator success.

Roblox Financial Statement Overview

Summary

Roblox demonstrates robust revenue growth and strong cash flow generation, crucial for sustaining operations and growth plans. However, persistent profitability issues and occasional negative equity pose risks to long-term financial health. The company should focus on improving margins and stabilizing its balance sheet.

Income Statement

Positive

Roblox's revenue has shown consistent growth, with a noticeable increase from 2020 to TTM 2025. Despite this growth, the company is facing profitability challenges, with negative net income and EBIT margins across periods. The gross profit margin remains healthy, indicating good control over direct costs.

Balance Sheet

Neutral

The balance sheet reflects strong liquidity with significant cash and short-term investments. However, the equity ratio is low, and the company has been operating with negative stockholders' equity in some periods, which raises concerns about financial stability. The debt-to-equity ratio is not meaningful due to negative equity values.

Cash Flow

Positive

Operating cash flow has been positive and growing, indicating effective cash generation from operations. Free cash flow is also positive, showing good capital expenditure management. The operating cash flow to net income ratio is strong, reflecting healthy cash conversion.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.84B	3.60B	2.80B	2.23B	1.92B	923.88M
	Gross Profit
2.99B	2.80B	2.15B	1.68B	1.42B	683.99M
	EBIT
-1.02B	-1.06B	-1.26B	-923.78M	-495.10M	-266.14M
	EBITDA
-614.55M	-670.25M	-909.63M	-761.86M	-421.40M	-220.54M
	Net Income Common Stockholders
-879.84M	-935.38M	-1.15B	-934.14M	-503.48M	-257.69M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.74B	2.41B	2.19B	2.98B	3.00B	893.94M
	Total Assets
7.45B	7.18B	6.17B	5.38B	4.56B	1.85B
	Total Debt
1.81B	1.81B	1.76B	1.56B	1.18B	344.83M
	Net Debt
646.50M	1.09B	1.08B	-1.42B	-1.82B	-549.12M
	Total Liabilities
7.16B	6.97B	6.10B	5.07B	3.97B	2.08B
	Stockholders Equity
310.69M	221.45M	76.29M	306.03M	584.82M	-252.39M
Cash Flow		Free Cash Flow
876.95M	642.67M	124.01M	-58.37M	557.98M	411.22M
	Operating Cash Flow
1.03B	822.32M	458.18M	369.30M	659.11M	524.34M
	Investing Cash Flow
-808.78M	-852.07M	-2.83B	-441.05M	-146.82M	-97.03M
	Financing Cash Flow
74.20M	65.89M	67.18M	43.64M	1.60B	164.97M

Roblox Technical Analysis

Technical Analysis Sentiment

Positive

Last Price91.07

Price Trends

50DMA

70.06

Positive

100DMA

66.71

Positive

200DMA

57.96

Positive

Market Momentum

MACD

6.08

Negative

RSI

87.41

Negative

STOCH

96.72

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RBLX, the sentiment is Positive. The current price of 91.07 is above the 20-day moving average (MA) of 82.45, above the 50-day MA of 70.06, and above the 200-day MA of 57.96, indicating a bullish trend. The MACD of 6.08 indicates Negative momentum. The RSI at 87.41 is Negative, neither overbought nor oversold. The STOCH value of 96.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RBLX.

Roblox Risk Analysis

Roblox disclosed 52 risk factors in its most recent earnings report. Roblox reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Roblox Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	78 Outperform	$26.17B	20.29	14.37%	0.99%	4.59%	83.27%
RBLX	73 Outperform	$61.01B	―	-460.30%	―	30.24%	27.61%
EA	70 Outperform	$36.67B	34.44	16.13%	0.51%	-0.81%	-9.28%
BILI	66 Neutral	$7.54B	―	-4.29%	―	21.11%	87.93%
PLTK	63 Neutral	$1.82B	13.01	-220.61%	8.23%	1.64%	-32.31%
Sector *	61 Neutral	$14.20B	5.93	-4.31%	3.70%	2.75%	-35.73%
TTWO	57 Neutral	$40.75B	―	-114.76%	―	5.31%	-15.57%

* Communication Services Sector Average

Performance Comparison

RBLX

Roblox

94.20

58.56

164.31%

Electronic Arts

147.88

11.19

8.19%

TTWO

Take-Two

231.03

65.36

39.45%

BILI

Bilibili

18.48

3.67

24.78%

TME

Tencent Music Entertainment Group

17.78

3.41

23.73%

PLTK

Playtika Holding

4.86

-3.59

-42.49%

Roblox Corporate Events

Executive/Board ChangesShareholder Meetings

Roblox Reincorporates to Nevada After Stockholder Meeting

Neutral

Jun 2, 2025

On May 29, 2025, Roblox Corporation held its 2025 Annual Meeting of Stockholders, where key decisions were made including the election of directors, approval of executive compensation, and ratification of Deloitte & Touche LLP as the accounting firm. Additionally, the stockholders approved the company’s reincorporation from Delaware to Nevada, effective May 30, 2025. This reincorporation did not alter the company’s business operations, management, or financial standing but did result in changes to stockholder rights and governance under Nevada law.

The most recent analyst rating on (RBLX) stock is a Buy with a $46.00 price target. To see the full list of analyst forecasts on Roblox stock, see the RBLX Stock Forecast page.

Business Operations and StrategyFinancial Disclosures

Roblox Reports Strong Q1 2025 Financial Growth

Positive

May 1, 2025

Roblox Corporation reported substantial year-over-year growth in its first quarter of 2025, with revenue increasing by 29% and bookings by 31%. The company exceeded its guidance across key metrics, driven by growth initiatives in platform monetization and creator earnings. Roblox’s financial results highlight a strong performance in all regions, with record levels of cash flow from operations and free cash flow. The company also provided guidance for the second quarter and full year 2025, projecting continued growth in revenue and bookings despite expected net losses. The announcement underscores Roblox’s strategic focus on enhancing its virtual economy and operational efficiencies, which are expected to benefit stakeholders, including developers and creators.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.