Roblox (RBLX) AI Stock Analysis

• Market Cap: $67.58B
• Dividend Yield: N/A
• Average Volume (3M): 8.35M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.10
• Revenue Growth: 32.70%
• EPS Growth: 12.57%
• Country: US
• Employees: 2,474
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -0.37
• Shares Outstanding: 654,855,040
• 10 Day Avg. Volume: 6,251,938
• 30 Day Avg. Volume: 8,350,298
• PEG Ratio: 1.74
• Price to Book (P/B): 169.18
• Price to Sales (P/S): 10.40
• P/FCF Ratio: 58.29
• Enterprise Value/Market Cap: 1.41
• Enterprise Value/Revenue: 21.39
• Enterprise Value/Gross Profit: 27.37
• Enterprise Value/Ebitda: -133.63
• 1Y Price Target: $148.53
• Price Target Upside: 54.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: $96.00 ▼(-0.29% Downside)

Roblox's overall stock score is driven by strong user growth and financial performance, as highlighted in the earnings call. However, profitability challenges and high leverage weigh heavily on the score. The technical analysis indicates a bearish trend, and valuation metrics are unattractive due to ongoing losses.

Positive Factors

Revenue Growth

Roblox's significant revenue growth reflects strong market demand and effective monetization strategies, supporting long-term expansion.

User Engagement

The substantial increase in daily active users indicates robust platform engagement, enhancing network effects and future revenue potential.

Technological Advancements

Investments in AI and technology improve platform capabilities, driving innovation and competitive advantage in the gaming industry.

Negative Factors

Profitability Challenges

Ongoing profitability issues highlight the need for improved cost management and operational efficiency to ensure long-term financial health.

High Leverage

High leverage can limit financial flexibility and increase risk, necessitating stronger equity to enhance balance sheet stability.

Margin Compression

Expected margin compression due to investments may pressure profitability, requiring careful management to maintain financial performance.

Roblox Business Overview & Revenue Model

Company Description

Roblox 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 Money

Roblox 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 Financial Statement Overview

Summary

Roblox shows strong revenue growth and cash flow generation, but struggles with profitability and high leverage. The company needs to improve cost management and strengthen its balance sheet for long-term sustainability.

Income Statement

Roblox shows strong revenue growth with a 10.95% increase in TTM, indicating a positive trajectory. However, the company struggles with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin remains robust at 78.13%, but the persistent net losses highlight challenges in cost management and achieving operational efficiency.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio of 1.52 in TTM, although improved from previous years. The return on equity remains negative, reflecting ongoing losses. The equity ratio is low, indicating potential financial instability. Despite some reduction in debt, the company needs to strengthen its equity base to improve financial health.

Cash Flow

Roblox demonstrates strong cash flow generation with a 35.83% growth in free cash flow in TTM. The operating cash flow to net income ratio is healthy, suggesting effective cash management. However, the free cash flow to net income ratio indicates that cash flow is not yet sufficient to cover net losses, highlighting the need for continued focus on cash flow improvements.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.46B	3.60B	2.80B	2.23B	1.92B	923.88M
Gross Profit	3.49B	2.80B	2.15B	1.68B	1.42B	683.99M
EBITDA	-714.46M	-670.25M	-910.95M	-761.86M	-421.40M	-220.54M
Net Income	-968.63M	-935.38M	-1.15B	-924.37M	-491.65M	-253.25M
Balance Sheet
Total Assets	8.59B	7.18B	6.17B	5.38B	4.56B	1.85B
Cash, Cash Equivalents and Short-Term Investments	2.86B	2.41B	2.19B	2.98B	3.00B	893.94M
Total Debt	1.76B	1.81B	1.76B	1.56B	1.23B	0.00
Total Liabilities	8.20B	6.97B	6.10B	5.07B	3.97B	2.08B
Stockholders Equity	407.57M	221.45M	76.29M	306.03M	584.82M	-252.39M
Cash Flow
Free Cash Flow	1.29B	642.67M	124.01M	-58.37M	557.98M	411.22M
Operating Cash Flow	1.37B	822.32M	458.18M	369.30M	659.11M	524.34M
Investing Cash Flow	-1.06B	-852.07M	-2.83B	-441.05M	-146.82M	-97.03M
Financing Cash Flow	97.65M	65.89M	67.18M	43.64M	1.60B	164.97M

Roblox Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 96.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 96.28 is below the 20-day moving average (MA) of 97.33, below the 50-day MA of 114.78, and below the 200-day MA of 98.74, indicating a bearish trend. The MACD of -5.89 indicates Negative momentum. The RSI at 40.43 is Neutral, neither overbought nor oversold. The STOCH value of 72.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RBLX.

Roblox Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTES	81 Outperform	$86.02B	17.86	24.65%	2.17%	5.69%	32.87%
EA	68 Neutral	$51.00B	59.60	13.20%	0.37%	-1.45%	-11.99%
PLTK	65 Neutral	$1.59B	18.34	―	9.43%	7.49%	-60.32%
BILI	62 Neutral	$10.83B	100.58	5.30%	―	16.84%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TTWO	54 Neutral	$45.80B	―	-86.61%	―	13.98%	-6.71%
RBLX	50 Neutral	$67.58B	-67.54	-324.24%	―	32.70%	12.57%

Roblox Corporate Events

Roblox Reports Strong Q3 2025 Revenue Growth

In its Q3 2025 report, Roblox announced a 48% year-over-year revenue growth and a 70% increase in bookings, with daily active users reaching 151.5 million. The company is advancing its safety protocols and AI capabilities, aiming to set a new standard for communication safety and enhance its platform’s user experience, despite potential short-term engagement impacts.

Roblox CPO Manuel Bronstein Announces Resignation

On July 28, 2025, Manuel Bronstein, Roblox‘s Chief Product Officer, announced his resignation to pursue personal interests and entrepreneurial ventures. His employment will officially end on September 30, 2025, after which he will continue to provide advisory services until April 13, 2026, receiving compensation and continued vesting of equity awards during this period.