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Roblox (RBLX)
NYSE:RBLX
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Roblox
(NYSE:RBLX)57Neutral
Positive Factors
Growth Opportunity
Roblox is seen as the most compelling growth opportunity in the video game sector due to its expanding user base and new products.
Monetization Strategy
The company has started monetizing non-paying users through advertising, which could significantly increase revenue.
Negative Factors
Engagement Shortfall
Roblox fell short on users and engagement, with daily active users and hours engaged not meeting estimates.
Roblox (RBLX) vs. S&P 500 (SPY)
Market Cap
$39.08B
Dividend YieldN/A
Average Volume (3M)10.55M
Price to Earnings (P/E)―
Beta (1Y)1.11
Revenue Growth28.68%
EPS Growth22.57%
CountryUS
Employees2,474
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)-1.45
Shares Outstanding618,997,300
10 Day Avg. Volume9,259,347
30 Day Avg. Volume10,554,704
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)10.85
Price to Cash Flow (P/CF)53.00
P/FCF Ratio81.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$68.68Price Target Upside20.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering21
Roblox Business Overview & Revenue Model
Company DescriptionRoblox Corporation is a leading online entertainment platform that allows users to create, share, and experience immersive 3D experiences. The company operates in the interactive entertainment and social networking sectors, providing a virtual universe where users can play games, socialize, and engage in digital commerce. Roblox's core product is its platform, which enables millions of user-generated games and experiences, fostering a vibrant community of creators and players worldwide.
How the Company Makes MoneyRoblox Corporation generates revenue primarily through the sale of its virtual currency, Robux, which users purchase with real money to access premium content and various in-game items. The company operates a freemium model where the basic platform is free, but users can enhance their experiences by buying Robux. Additionally, Roblox shares a portion of the revenue with its developers, incentivizing them to create engaging content. The company also earns money through advertising and licensing agreements, as well as partnerships with brands that wish to create unique experiences or events on the Roblox platform. These diverse revenue streams, combined with a growing user base, contribute significantly to Roblox's financial success.
Roblox Financial Statement Overview
Summary
Roblox shows impressive revenue growth, but profitability issues persist with negative earnings. The balance sheet is burdened by high liabilities and low equity, posing financial risks. Positively, cash flow from operations is strong, although its volatility remains a concern.Income Statement
Roblox has demonstrated a significant revenue growth trend, with total revenue increasing from $508 million in 2019 to $3.6 billion in 2024. However, the company's profitability is concerning, as evidenced by consistently negative EBIT and net income margins over the years, suggesting ongoing operational challenges. The gross profit margin has also declined, highlighting increased cost pressures.45
Neutral
Balance Sheet
The balance sheet reveals a high level of liabilities relative to equity, with a troubling debt-to-equity ratio due to low stockholders' equity. While total assets have grown, this has not translated into improved equity standing. Negative equity in some years poses a risk, indicating financial instability.40
Negative
Cash Flow
Roblox's operating cash flow has shown positive growth, contributing to strong free cash flow in recent years. The operating cash flow to net income ratio is favorable, suggesting effective cash generation despite net losses. However, the free cash flow growth rate has been volatile, reflecting variability in cash management.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.60B | 2.80B | 2.23B | 1.92B | 923.88M | Gross Profit |
| 962.58M | 2.15B | 1.68B | 1.42B | 683.99M | EBIT |
| -1.06B | -1.26B | -923.78M | -495.10M | -266.14M | EBITDA |
| -668.88M | -909.63M | -761.86M | -421.40M | -220.54M | Net Income Common Stockholders |
| -935.38M | -1.15B | -934.14M | -503.48M | -257.69M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.41B | 2.19B | 2.98B | 3.00B | 893.94M | Total Assets |
| 7.18B | 6.17B | 5.38B | 4.56B | 1.85B | Total Debt |
| 1.68B | 1.76B | 1.56B | 1.18B | 344.83M | Net Debt |
| 964.74M | 1.08B | -1.42B | -1.82B | -549.12M | Total Liabilities |
| 6.97B | 6.10B | 5.07B | 3.97B | 2.08B | Stockholders Equity |
| 221.45M | 76.29M | 306.03M | 584.82M | -252.39M |
| Cash Flow | Free Cash Flow | |||
| 642.67M | 124.01M | -58.37M | 557.98M | 411.22M | Operating Cash Flow |
| 822.32M | 458.18M | 369.30M | 659.11M | 524.34M | Investing Cash Flow |
| -852.07M | -2.83B | -441.05M | -146.82M | -97.03M | Financing Cash Flow |
| 65.89M | 67.18M | 43.64M | 1.60B | 164.97M |
Roblox Technical Analysis
Negative
57.17
Price Trends
63.95
Negative
57.28
Negative
48.55
Positive
Market Momentum
-1.47
Positive
35.42
Neutral
35.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RBLX, the sentiment is Negative. The current price of 57.17 is below the 20-day moving average (MA) of 62.86, below the 50-day MA of 63.95, and above the 200-day MA of 48.55, indicating a neutral trend. The MACD of -1.47 indicates Positive momentum. The RSI at 35.42 is Neutral, neither overbought nor oversold. The STOCH value of 35.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RBLX.
Roblox Risk Analysis
Roblox disclosed 54 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $35.65B | 34.81 | 14.04% | 0.56% | -2.99% | -0.46% | |
62 Neutral | $36.69B | ― | -51.45% | ― | 1.00% | -148.89% | |
62 Neutral | $7.85B | 15.50 | -865.98% | 0.61% | 3.41% | -10.41% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
58 Neutral | $9.49B | ― | -20.84% | ― | -17.10% | 21.82% | |
57 Neutral | $39.08B | ― | -628.33% | ― | 28.68% | 22.57% |
* Communication Services Sector Average
Performance Comparison
RBLX
Roblox
57.17
15.13
35.99%
EA
Electronic Arts
140.04
4.04
2.97%
TTWO
Take-Two
204.33
58.46
40.08%
MTCH
Match Group
32.62
-1.28
-3.78%
U
Unity Software
24.19
-2.91
-10.74%
Roblox Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -24.25% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call presented strong financial performance with significant growth in revenue, bookings, and engagement, alongside major advancements in AI and infrastructure. However, challenges such as varied console growth and regional DAU declines were noted.Highlights
Strong Revenue and Bookings Growth
Q4 revenue was $988 million, up 32% year-on-year, and bookings were $1.362 billion, up 21% year-on-year, both surpassing guidance.
Significant DAU Growth in Key Markets
Daily Active Users (DAUs) in Q4 reached 85.3 million, up 19% year-on-year, with over 50% growth in Japan and India.
Increased Engagement and Developer Payouts
Q4 engagement hours were 18.7 billion, up 21% year-on-year, and $922 million was shared with the developer community in 2024, a 27% increase year-on-year.
Record Free Cash Flow
Free cash flow for Q4 was $120 million, up 54%, and for the year, it increased over 5x from $124 million in 2023 to $641 million in 2024.
AI and Infrastructure Improvements
Infrastructure and trust and safety costs were improved through AI efficiencies, with a 99.999% uptime achieved in December.
Lowlights
Console Growth Challenges
Console bookings faced tough comparisons due to the previous year's PlayStation launch and Xbox updates, resulting in varied growth rates.
DAU Decline in Eastern Europe
DAU growth in Eastern Europe, particularly Turkey, was slower due to prior platform release impacts.
Company Guidance
During Roblox's Q4 and fiscal year 2024 earnings call, the company reported surpassing all guidance metrics provided in the previous quarter. Notably, Q4 revenue reached $988 million, a 32% year-on-year increase, exceeding the forecasted $960 million. Bookings for the quarter were $1.362 billion, up 21% year-on-year, surpassing the guidance of $1.361 billion. Daily Active Users (DAUs) grew to 85.3 million, marking a 19% year-on-year increase, with significant growth over 50% in Japan and India. The platform saw 18.7 billion engagement hours in Q4, a 21% increase from the previous year. Roblox shared $922 million with developers in 2024, with $280 million in Q4 alone, a 27% year-on-year rise. Operationally, Q4 cash was up 29% to $184 million, and free cash flow increased 54% to $120 million, surpassing the high-end guidance of $115 million. The company emphasized its commitment to achieving 10% of the global gaming content market share, leveraging advancements in AI, infrastructure, and platform monetization.Roblox Corporate Events
Business Operations and StrategyFinancial Disclosures
Roblox Reports Strong Revenue Growth Amidst Net Loss
Positive
Feb 6, 2025
On February 6, 2025, Roblox reported its financial results for the fourth quarter and full year of 2024, showcasing notable growth in revenue and bookings by 32% and 21% respectively, as well as an increase in daily active users and engagement hours. Despite a net loss, the company achieved significant improvements in cash flow and adjusted EBITDA, highlighting its operational leverage. Roblox also provided forward-looking guidance for 2025, projecting continued growth in revenue and bookings, and focusing on enhancing its platform through investments in virtual economy and safety features, thereby positioning itself strongly in the competitive gaming industry.
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.