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Roblox (RBLX)
NYSE:RBLX
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Roblox
(NYSE:RBLX)
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Rating:52Neutral
Price Target:
$74.00
▲(7.78% Upside)
Action:ReiteratedDate:02/07/26
The score is driven by strong cash flow and constructive 2026 growth guidance, but is held back by ongoing losses with margin volatility, balance-sheet leverage/low equity cushion, and a technically weak chart with the stock trading well below key moving averages.
Positive Factors
Strong free cash flow
Roblox's substantial and improving cash generation (OFC ≈ $1.8B; FCF ≈ $1.36B in 2025) provides durable funding for AI, safety, DevEx increases and modest CapEx. Positive FCF supports strategic investments and liquidity, reducing reliance on external financing despite accounting losses.
Scale and engagement growth
Sustained user and engagement expansion (strong FY25 revenue/bookings and Q4 DAU/engagement gains) indicate powerful network effects and platform scalability. High engagement drives Robux demand, improves discovery algorithms, and increases monetization potential across creators and advertisers over the medium term.
Robust creator economy (DevEx)
Growing creator payouts and rising DevEx demonstrate a healthy two‑sided marketplace: meaningful creator earnings attract and retain top developers, improving content supply and user retention. This structural ecosystem reinforces monetization and platform stickiness independent of single-hit titles.
Negative Factors
Elevated leverage / thin equity cushion
Although leverage improved from prior peaks, debt remains high relative to a thin equity base (≈4.1x in 2025). Elevated leverage increases financial risk and reduces flexibility to absorb shocks or fund heavier investment cycles if cash flow growth slows or CapEx/memory inflation pressures persist.
Persistent losses & margin volatility
The company has reported annual net losses and experienced a sharp gross‑margin collapse in 2025, reflecting volatile unit economics. Persistent unprofitability and margin swings undermine sustainable earnings power and increase dependence on cash generation and investor capital to support long-term growth initiatives.
Guidance sensitivity & margin pressure
Management excluded another viral hit from 2026 guidance and flagged margin headwinds from an 8.5% DevEx increase plus higher AI, safety and infrastructure costs. This structural sensitivity means top‑line upside is uneven and margins may remain constrained despite revenue growth.
Roblox (RBLX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$48.66B
Dividend YieldN/A
Average Volume (3M)13.12M
Price to Earnings (P/E)―
Beta (1Y)1.04
Revenue Growth32.70%
EPS Growth12.57%
CountryUS
Employees2,474
SectorCommunication Services
Sector Strength97
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)-0.45
Shares Outstanding661,635,560
10 Day Avg. Volume9,620,003
30 Day Avg. Volume13,116,225
Financial Highlights & Ratios
PEG Ratio-7.56
Price to Book (P/B)141.65
Price to Sales (P/S)11.43
P/FCF Ratio41.23
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue10.04
Enterprise Value/Gross Profit12.86
Enterprise Value/Ebitda-61.20
Forecast
1Y Price Target
$112.50Price Target Upside63.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)-1.57
Revenue Forecast (FY)$8.40B
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 generates revenue through multiple key streams. The primary source of income is the sale of its virtual currency, Robux, which players use to purchase in-game items, accessories, and avatar customization options. Roblox takes a percentage of the transactions made on its platform, allowing developers to monetize their games through in-game purchases and advertisements. Additionally, Roblox earns revenue from subscription services like Roblox Premium, which offers users a monthly allowance of Robux and exclusive benefits. The company also benefits from partnerships with brands and developers, enabling them to create tailored experiences and promotional content within the platform, further enhancing its revenue potential. Overall, the combination of user spending on Robux, premium subscriptions, and partnerships forms the backbone of Roblox's revenue model.
Roblox Key Performance Indicators (KPIs)
Any
Total Daily Active Users
Monitors the number of users engaging with Roblox daily, indicating the platform's popularity, user retention, and potential for monetization.
Monitors the number of users engaging with Roblox daily, indicating the platform's popularity, user retention, and potential for monetization.
Data provided by:
The Fly
The FlyRoblox Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call highlights a very strong 2025 with outsized revenue, bookings, engagement, creator payouts, international growth, and clear technical/AI momentum. Management provided constructive 2026 guidance (22%–26% bookings growth) while acknowledging conservative assumptions (no assumed viral hit) and planned investments that may temper near‑term margin expansion. Key risks include guidance sensitivity to viral content, higher DevEx and investment‑driven margin pressure, and ongoing CapEx/cost inflation. Overall, positives materially outweigh the negatives.Q4-2025 Updates
Positive Updates
Spectacular Full-Year Revenue and Bookings Outperformance
FY2025 revenue grew 36% year‑over‑year and bookings grew 55% year‑over‑year, materially exceeding prior guidance.
Strong Q4 Financial Results
Q4 revenue was $1.4B (up 43% YoY) and Q4 bookings were $2.2B (up 63% YoY), demonstrating continued end‑of‑year momentum.
Explosive Engagement and DAU Growth
Q4 DAUs grew 69% YoY; engagement reached 35 billion hours in Q4 (up >88% YoY); users on average engaged with over 24 unique experiences per month in 2025 (double‑digit increase vs. 2024).
Creator Economy Expansion (DevEx)
Creators earned over $1.5B in 2025 for the first time; Q4 DevEx was $477M (up 70% YoY); top 1,000 creators averaged $1.3M each (up >50% YoY).
International & APAC Strength
APAC revenue grew 96% YoY in Q4 with standout country growth: Japan +160% YoY, India +110% YoY, Indonesia >700% YoY; US & Canada grew 41% YoY.
Platform Scalability and Concurrency Records
Platform peak concurrency hit ~45 million users (August 2025); individual-game peak example: Steel of Brain Rot reached 25.4M concurrents in September 2025.
Safety Improvements and Age Verification Rollout
Rolled out facial age estimation globally (completed January 2026); achieved ~60% DAU age‑checked in initial markets (US, Australia, New Zealand, Netherlands) and ~45% global DAU penetration as of January.
Significant AI & Tech Investments Driving Discovery and Creation
Running over 400 internal AI models; capture ~30,000 years of human interaction data daily (privacy‑compliant); launched 4D generation and various cloud/streaming, compositing (Slim), native server, and matchmaking features; AI produced a double‑digit increase in unique experiences surfaced by recommendations.
2026 Guidance and Cash Flow Outlook
Management guided 2026 bookings growth of 22%–26% and expects ~26% YoY free cash flow growth at the midpoint, while funding targeted investments (AI, safety, CapEx) and landing additional GPUs.
Gross Margin Tailwinds
Q4 gross margin benefited from steering purchases to lower‑cost payment platforms and strong bookings leverage; management expects continued COGS improvements over time.
Negative Updates
Guidance Conservatism and Q1 Sequential Decline
Company cautioned guidance is conservative without assuming another massive viral hit; Q1 bookings guide implies a sequential decline (>20% sequential slowdown in bookings guidance) which spurred investor questions.
Margin Pressure from Higher DevEx Rate and Investments
Full‑year 2026 margin outlook reflects pressure from the higher DevEx payout (8.5% increase announced in Sept), increased AI workload costs, and elevated investments in safety and marketing—margins may be flat at the high end of bookings and slightly down at the low end.
Dependence on Viral Hits Adds Forecast Uncertainty
Management acknowledged unpredictability of large viral titles (e.g., Grow a Garden, Steel of Brain Rot) and noted they did not include a similar hit in 2026 guidance, creating variability in outcomes.
Advertising Still a Modest Near‑Term Revenue Contributor
Advertising is expected to grow healthily in 2026 but remains a modest contributor to near‑term top line and requires time and careful product buildout.
Capital/Cost Headwinds — CapEx and Memory Inflation
Free cash flow guidance assumes a slight CapEx uptick to land GPUs in data centers; management cited recent memory price inflation as a headwind to infrastructure costs.
Stock‑Based Compensation and Potential Dilution
With the stock price lower than prior periods, stock‑based compensation may create short‑term dilution volatility, though management emphasizes long‑term operating performance to resolve dilution.
Age Verification Adoption Not Yet Universal
Global age‑check penetration was reported at ~45% of DAUs as of January — meaningful progress but not yet universal; management continues to push adoption and reliability improvements.
Company Guidance
Roblox guided 2026 bookings growth of 22%–26% (reiterating conviction to grow >20%) and said this outlook does not assume another viral hit; at the midpoint it expects ~26% year‑over‑year free cash flow growth, a slight uptick in CapEx to land GPUs, and margins that are flat at the high end of the bookings range and slightly down at the low end (reflecting the full‑year impact of the DevEx rate increase and investments in AI, safety marketing, creators and infrastructure). The guidance is informed by product signals — completed global age‑check rollout in January with ~45% global DAU penetration (≈60% in early markets), an 18+ cohort growing >50% that monetizes ~40% higher — and by 2025 momentum (2025 revenue +36%, bookings +55%; Q4 revenue $1.4B +43% YoY, Q4 bookings $2.2B +63% YoY, Q4 DAUs +69% YoY, Q4 engagement 35B hours +88% YoY, nearly 37M quarterly monthly unique payers, DevEx $477M Q4 and creators earned >$1.5B in 2025); the company plans to move to quarter‑by‑quarter guidance in 2027.Roblox Financial Statement Overview
Summary
Strong and improving cash generation (2025 operating cash flow ~$1.80B; free cash flow ~$1.36B) and consistent revenue growth are offset by persistent net losses, sharp gross-margin deterioration in 2025, and a leveraged/low-equity balance sheet that raises financial risk.Income Statement
Revenue has grown consistently from 2020 to 2025, with 2025 showing solid top-line expansion (+9.6%). However, profitability remains a key weakness: the company has reported net losses every year, and 2025 margins deteriorated sharply (gross margin fell to ~24% vs ~78% in 2024), keeping operating results deeply negative. Overall, strong growth but still lacking earnings power and showing margin volatility.38
Negative
Balance Sheet
The balance sheet shows meaningful leverage relative to a thin equity base. Debt-to-equity remains elevated despite improvement from the 2023 peak (about 4.1x in 2025 vs 8.2x in 2024 and 23.1x in 2023), and returns on equity are deeply negative due to ongoing losses. Asset base has expanded, but low equity cushion and negative profitability increase financial risk.34
Negative
Cash Flow
Cash generation is a clear strength. Operating cash flow and free cash flow are strongly positive and improving, reaching about $1.80B and $1.36B in 2025, respectively, with positive free-cash-flow growth across most years (notably recovering strongly after 2022). While accounting losses persist, the business is producing substantial free cash flow, supporting liquidity and financial flexibility.76
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.89B | 3.60B | 2.80B | 2.23B | 1.92B |
| Gross Profit | 3.82B | 2.80B | 2.15B | 1.68B | 1.42B |
| EBITDA | -802.17M | -670.25M | -910.95M | -761.86M | -421.40M |
| Net Income | -1.07B | -935.38M | -1.15B | -924.37M | -491.65M |
Balance Sheet | |||||
| Total Assets | 9.56B | 7.18B | 6.17B | 5.38B | 4.56B |
| Cash, Cash Equivalents and Short-Term Investments | 3.06B | 2.41B | 2.19B | 2.98B | 3.00B |
| Total Debt | 1.64B | 1.81B | 1.76B | 1.56B | 1.23B |
| Total Liabilities | 9.18B | 6.97B | 6.10B | 5.07B | 3.97B |
| Stockholders Equity | 394.48M | 221.45M | 76.29M | 306.03M | 584.82M |
Cash Flow | |||||
| Free Cash Flow | 1.36B | 642.67M | 124.01M | -58.37M | 557.98M |
| Operating Cash Flow | 1.80B | 822.32M | 458.18M | 369.30M | 659.11M |
| Investing Cash Flow | -1.39B | -852.07M | -2.83B | -441.05M | -146.82M |
| Financing Cash Flow | 88.53M | 65.89M | 67.18M | 43.64M | 1.60B |
Roblox Technical Analysis
Neutral
68.66
Price Trends
74.17
Negative
92.03
Negative
102.93
Negative
Market Momentum
-2.16
Negative
48.90
Neutral
88.91
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RBLX, the sentiment is Neutral. The current price of 68.66 is above the 20-day moving average (MA) of 65.98, below the 50-day MA of 74.17, and below the 200-day MA of 102.93, indicating a neutral trend. The MACD of -2.16 indicates Negative momentum. The RSI at 48.90 is Neutral, neither overbought nor oversold. The STOCH value of 88.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RBLX.
Roblox Risk Analysis
Roblox disclosed 53 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $70.33B | 15.77 | 22.36% | 2.19% | 5.69% | 32.87% | |
70 Outperform | $50.19B | 75.30 | 10.03% | 0.37% | -1.45% | -11.99% | |
65 Neutral | $11.75B | 108.77 | 5.30% | ― | 16.84% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
57 Neutral | $39.16B | -9.45 | -86.22% | ― | 13.98% | -6.71% | |
54 Neutral | $1.17B | ― | ― | 9.98% | 7.49% | -60.32% | |
52 Neutral | $48.66B | -44.54 | -345.84% | ― | 32.70% | 12.57% |
* Communication Services Sector Average
RBLX
Roblox
68.66
6.48
10.42%
EA
Electronic Arts
200.57
71.89
55.87%
NTES
NetEase
114.97
20.78
22.06%
TTWO
Take-Two
211.48
3.43
1.65%
BILI
Bilibili
27.90
8.10
40.91%
PLTK
Playtika Holding
3.09
-1.52
-32.97%
Roblox Corporate Events
Business Operations and StrategyFinancial Disclosures
Roblox Reports Strong 2025 Growth and Strategic AI Investments
Positive
Feb 5, 2026
In a February 5, 2026 shareholder communication, Roblox reported that fiscal 2025 was a strong year, with revenue rising 36% year-over-year to $4.9 billion, bookings up 55% to $6.8 billion, and operating cash flow reaching $1.8 billion, driven by roughly 60 million additional daily active users between the fourth quarters of 2024 and 2025 and deeper user engagement. The company said its fourth-quarter 2025 results also exceeded expectations, highlighted by 69% growth in daily active users, an 88% increase in hours engaged, and 155% growth in free cash flow on 63% bookings growth, while its share of the global gaming content market reached 3.4%, underscoring its growing scale. Roblox outlined a strategic push to capture a larger adult audience—where usage and monetization are growing faster than among younger users—through support for “novel” higher-fidelity game genres and new platform technologies such as SLIM, Server Authority, and Texture Streaming. It also emphasized heavy investment in artificial intelligence and safety infrastructure, with over 400 AI models deployed for creation, discovery, and moderation, open-sourced safety tools, and a roadmap aimed at accelerating content creation, enhancing user discovery, and reinforcing safety and civility as a competitive advantage, which together are intended to support long-term growth and margin expansion.
The most recent analyst rating on (RBLX) stock is a Buy with a $110.00 price target. To see the full list of analyst forecasts on Roblox stock, see the RBLX Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.