The investment community is abuzz with chatter about Roblox (RBLX 0.32%) stock. The metaverse pioneer's stock has been on a face-ripping rally in the last month. Indeed, the stock is up more than 27%.  

That's a surprising surge considering the company faces strong headwinds amid the economic reopening. Roblox thrived when people were spending more time at home. With more outdoor entertainment options, folks are not looking to Roblox as often. 

Facing headwinds from economic reopening 

Interestingly, Roblox had 19.1 million daily active users (DAU) in the fourth quarter of 2019, before the outbreak. Roblox proceeded to capture millions of new customers as COVID-19 started spreading worldwide. At its peak, Roblox boasted 54.1 million DAUs. In recent months, that figure has fallen to 50.4 million.

Notably, Roblox is free to download and use. The company makes money by selling an in-game currency (Robux) that players can use to access premium features. Roblox is struggling in that regard, too. Bookings fell by 10% in May from the same month the year before. Bookings eventually become revenue when players spend Robux in the app. Therefore, the decrease in bookings could indicate a revenue slowdown in the upcoming quarters.

The trend is worse when accounting for user growth. The average bookings per daily active user were down 23.5% in May from the same month the year before. It's further evidence that the economic reopening is creating more options for what folks can do with their time and money, and they are more often choosing to divert spending away from Roblox.

RBLX Free Cash Flow (Quarterly) Chart

RBLX Free Cash Flow (Quarterly) data by YCharts

Of course, these disappointing usage trends are hurting Roblox's cash flows. In its first quarter of 2022, which ended on March 31, free cash flow fell to $104.6 million from $142.1 million the year before. Similarly, free cash flow in its fourth quarter of 2021 was $77.3 million, significantly below the $118.6 million in the same quarter the year before.

Roblox's stock isn't cheap anymore

With these critical metrics falling, one has to wonder why Roblox's stock surged 34% in the last month. Could it be that the market felt the stock had been punished too much? After all, even after the surge, the stock is down 70% off its all-time high. Or could it be optimism for Roblox's initiatives to monetize its user base better? Management had noted it is developing the capability to earn revenue through advertisements, which would allow it to make money on all players, not just the ones depositing money.

RBLX Price to Free Cash Flow Chart

RBLX Price to Free Cash Flow data by YCharts

I tend to feel that it is a bit of both. Roblox was trading at a price-to-free-cash-flow (P/FCF) ratio of 25, its lowest ever by that measure. I had written that investors should buy Roblox stock before a big rally takes it higher, and now it might be too late. The stock is no longer cheap at a P/FCF multiple of 47. Nevertheless, the sharp rally is excellent fodder for discussion.