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Roblox: Don't Chase For Now

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Update - Oct. 30, 2025 

Roblox reported massive Q3'25 growth with bookings up 70% to $1.9 billion. The stock is down roughly 10% with the market lost focusing on GAAP revenue and net loss metrics, which don't fully incorporate billings. 

  • Q3 Net loss of $257M
  • Revenue of $1.4B (+23.9% Y/Y) misses by $300M.
  • Bookings up 70% Y/Y to $1.9B
  • Average Daily Active Users 151.5M (+70% Y/Y)

The mobile gaming platform reported bookings grew nearly $500 million above the record levels in Q2. The market cap has dipped to $82 billion and the company is likely to see 2026 bookings estimates reach $8+ billion next year, so the stock trades at ~10x forward bookings. 

Roblox isn't historically cheap, but this level of bookings growth will warrant higher valuation multiples. 

Original article posted on Sept. 9 

  • Roblox remains a top growth story, but the stock is now priced for perfection after a major run.
  • The immersive gaming platform faces more child safety lawsuits and engagement concerns, but record user engagement and new safety tools show continued platform strength.
  • The stock valuation is stretched at over 12x 2026 bookings and 95x 2025 free cash flow, with growth expected to normalize back to 20%.
  • Roblox offers long-term upside, but I recommend caution at current levels above $125 and suggest waiting for a better entry point.
Roblox Corporation (NYSE:RBLX) has had a major run this year, reducing the appeal of the stock. The immersive gaming platform remains one of the great growth stories, but Roblox is priced for perfection, and any hints at internal problems will hit the stock. My investment thesis remains Neutral on the stock after this run-up.


Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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