Roblox stock (RBLX) is trading like a fad that peaked with lockdown kids, not like a platform that is quietly turning into gaming’s YouTube. At around $91, shares sit 36% below their September high, even as bookings and user engagement keep climbing. If the market starts valuing Roblox as an infrastructure business instead of a string of one-off hits, the stock could reasonably revisit $142, which would be roughly 50% upside from recent levels.
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Roblox Builds a Hit Factory
Roblox’s recent breakout games show how powerful that factory has become. In September, Steal a Brainrot hosted 25 million concurrent players, topping the record set earlier by Grow a Garden. Since May, Steal a Brainrot has been played more than 42 billion times, and Roblox did not build it. The company provides the creation tools and global distribution, similar to the way YouTube unlocked video.
“If you think about the disruption that YouTube brought to video and the idea that anybody could create, anybody could distribute, you didn’t need $10 million, $20 million, $50 million budgets to create something,” Manuel Bronstein, a Roblox advisor and former chief product officer, told Barron’s. “We’re doing the same for games.” A teenager built Grow a Garden in a few days, while Grand Theft Auto’s next version at Take-Two (TTWO) has taken more than a decade and up to $2 billion, along with a market value hit when it was delayed again this month.
Platform Turns User Creators into a Scalable Business
The catalog keeps refreshing itself. Brookhaven has been played 75 billion times since 2020. Newer hits like 99 Nights in the Forest and Fish It! climb the charts without giant budgets, as Roblox’s recommendation engine and social graph do the heavy lifting. “None of the top 100 would ever make it through the brainstorming meeting at a mobile game studio,” developer Yonatan Raz-Fridman said. “They’re almost exclusively games built by native Roblox developers.”
The business model behind that activity is already big. Roblox generated $3.6 billion of revenue last year, but bookings, the cleaner measure of money flowing in, reached $4.4 billion and are expected to hit $6.6 billion this year. The company lost $256 million in the latest quarter on $1.4 billion of revenue, yet it still produced $444 million in free cash flow as players spent real money on Robux for in-game items and progression.
Wall Street Discounts Growth While Roblox Spends on Safety
Despite bookings growing at a double-digit clip, investors treat Roblox like a hit driven publisher. The stock trades at roughly eight times next year’s bookings, only a slight premium to slower Electronic Arts (EA), even though Roblox bookings have grown at an annualized 44% over six years and accelerated in the last two quarters. Management believes recent investment in infrastructure, cloud and tooling will support another leg of growth as the user base ages up and time spent stays near three hours a day.
Safety spending is the main overhang. Roblox faces lawsuits and scrutiny around child protection and has responded by tightening moderation and rolling out AI age estimation for communication features. “Our goal is to make Roblox far safer than anything else you could be spending time on, far safer than going to a playground, far safer than even going to school,” chief safety officer Matt Kaufman said. Those costs squeeze margins in the near term, but they also raise the barrier to entry for rivals that cannot match the same investment.
If Roblox continues to prove it is a durable platform rather than a pandemic relic, the market’s view can shift. A move back to the September high near $142 would simply value the company more like an at scale user generated platform and less like a one-off gaming trade.
Is Roblox a Good Stock to Buy?
Turning to TipRanks, Wall Street remains bullish on Roblox, even after the stock’s recent pullback. Out of 21 analysts covering the name, 14 rate it a Buy, six sit at Hold, and only one carries a Sell rating. The average 12-month RBLX price target now sits at $151.06, implying roughly 63% upside from the recent share price.
