Metaverse and gaming platform Roblox Corporation (RBLX 4.10%) went public in 2021 when lockdowns were juicing its growth and the stock market was entering a euphoric state.

However, the air has left the balloon, and the stock has fallen almost 70% from its high. This quick takeaway might paint Roblox as a fad, a stock that will never soar to new heights.

But things aren't always what they seem. Here is what matters for Roblox moving forward, and why there's a lot to like.

From hero to zero

Roblox operates an online entertainment platform where users can participate in games and experiences, socialize, shop, and more. The platform is two-sided, consisting of users on one end and developers that build these interactions on the other. Robux is a virtual currency that fuels the ecosystem; users spend Robux, and developers earn and exchange it for fiat currency.

The platform is notoriously popular with minors, which helped fuel growth tremendously during the pandemic when kids weren't leaving the house much. You can see below how revenue growth fell off a cliff as the world opened back up.

RBLX Revenue (Quarterly YoY Growth) Chart

RBLX Revenue (Quarterly YoY Growth) data by YCharts

This slowdown, combined with a bear market that's decimated nearly all growth stocks in 2022, has dropped the stock almost 70% from its peak.

Let's cut Roblox some slack

Slowing growth isn't ideal, but there is some much-needed context in Roblox's case. For starters, it's hard to build on triple-figure growth, which Roblox experienced for much of last year.

So while Roblox grew revenue just 39% year-over-year in 2022 Q1, remember that revenue grew 140% in the year-ago quarter.

I'm not trying to say that it's all roses and daisies -- there are some concerns. Bookings have shown that revenue growth is still trending lower. When someone buys Robux, the virtual currency the Roblox platform runs on, they often don't spend all of it immediately. Bookings track Robux sold, so it's essentially a leading indicator of where revenue growth is going, because the currency is only recognized as revenue once it's spent.

Bookings growth was minus 3% in 2022 Q1, so investors should prepare for growth to slow further in upcoming quarters. Again, bookings in the year-ago quarter were up 161% year-over-year.

The company's engagement data shows that users are playing less than before, a reasonable outcome now that social interactions are essentially back to normal. Users could be sitting on Robux they already stocked up on.

Investors should watch upcoming quarters closely to see whether bookings begin to pick back up again as this plays out. There is also a really encouraging sign that supports Roblox's staying power.

The three words that matter most

Roblox's long-term success could be determined by how well it grows the platform's user base, which makes daily active users (DAU) a critical metric to follow moving forward.

The good news is that DAU growth has remained more resilient than revenue and bookings; year-over-year growth has steadied between 28% and 32% over the past four quarters. Steady user growth should eventually trickle through to bookings and revenue growth, so think of it as the seed for future growth. The investment thesis could bust if user growth drops off.

Roblox should endure the current bear market just fine. The company has more than $2 billion in net cash, and generated $520 million in free cash flow over the past year.

The stock might not be eye-poppingly cheap at a price-to-sales ratio of almost 12, but it seems that there's fertile ground for long-term investment returns if Roblox can keep growing its platform.