What happened
It's IPO day plus one for Roblox Corporation (RBLX 1.70%), the red-hot gaming hub that's entertained our kids all through the pandemic. Yesterday, as you've probably heard, Roblox debuted on the NYSE after noon, shooting straight from its $45 "reference price" to begin trading at $64.50, ultimately closing the day up 7.7% at $69.50.
This morning, the momentum continued, and Roblox is up another 5.3% as of 10 a.m. EST.

Image source: Roblox Corporation.
So what
Roblox's astonishingly good performance yesterday wasn't actually a huge surprise. Although the NYSE had set a reference price of $45 on the shares, based on their last-known cost in a private transaction, early indications on TheFly.com from bids coming in suggested the stock would begin trading much higher. As early as 10:30 a.m., in fact -- three hours before the first trade was executed -- TheFly pegged the stock as "indicated to open at $60-$65" a share.
Still, as the shares wobble from higher to merely high on their first full day of trading, investors are clearly playing it by ear, uncertain how much they should be paying for a share of Roblox. This is the nature of direct-listing IPOs.
Now what
Now here's something that might help you decide what that "right price" really should be. A first read on the stock from data provider S&P Global Market Intelligence shows Roblox with 550.5 million shares outstanding and a market capitalization of $38.3 billion.
The company is GAAP unprofitable, so you can't value the stock on P/E. You can, however, value it on its $924 million in trailing sales: Roblox costs 41.4 times sales, which sounds like a lot. You can also value Roblox stock on its tremendous free cash flow of $420 million generated over the last 12 months -- and by that measure, Roblox seems less expensive at 91.2 times free cash flow.
Whether that's still too expensive for your taste is a decision only you can make -- but at least now you have the numbers you need to make the decision.