What happened

Shares of Roblox (NYSE:RBLX) fell 8% on Wednesday after the popular video-game platform reported a sequential decline in users. 

So what

Roblox said its daily active users (DAU) numbered 43 million in May. Although that was up 28% from the prior-year period, it was down 1% from April.

Moreover, the company's average bookings per DAU -- the amount of virtual currency purchased per user -- is expected to decline 2% to 3% year over year, to between $5.02 and $5.09.

A person is pointing to a stock chart that rises sharply and then falls.

Roblox's share price pulled back sharply on Wednesday. Image source: Getty Images.

Still, the total hours spent by users on Roblox's platform increased 1% sequentially and 9% year over year to 3.2 billion. Its total bookings and revenue, in turn, are projected to rise as much as 26% and 126%, respectively, to $219 million and $151 million.

Now what

Roblox enjoyed explosive growth during the early stages of the pandemic as kids and their parents sought out safer forms of entertainment. But with vaccinations ramping up and people returning to more outdoor activities, Roblox's growth appears to be slowing.

Worse still, decelerating growth is arguably not reflected in Roblox's stock price. Even after today's losses, its shares are currently trading for roughly 18 times analysts' revenue estimates for 2021. Thus, if Roblox's user growth metrics continue to deteriorate, it's possible that its stock price could decline further in the coming months.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.