Roblox's (RBLX -1.36%) user growth and engagement soared at the pandemic's onset. The company is one of the pioneers of the metaverse, where people can interact virtually with each other and the environment. It benefited from the trend of increasing demand for at-home entertainment. 

That said, most economies are well on their way to reopening schools, slowly bringing employees back to offices, and removing business restrictions. As a result, folks are eager to get out of their homes and experience forms of entertainment they missed out on for roughly two years. Those forces are now working against Roblox as its key metrics are deteriorating. 

Players are depositing less money on Roblox 

In its most recent quarter, which ended on June 30, Roblox's revenue increased by 30% to $591 million. That marked the fifth consecutive quarter of Roblox's revenue growth decelerating. It peaked at a whopping 140% in the first quarter of 2021 before falling to 30% in the second quarter of 2022. The figure could have more room to fall before the headwinds from economic reopening are fully reflected in Roblox's results.

Chart showing Roblox's revenue growth falling since early 2021.

RBLX Revenue (Quarterly YoY Growth) data by YCharts.

Roblox is free to join and use for the most part. It makes money by selling an in-game currency called Robux. This currency is required for premium experiences inside the app. When a player purchases Robux, it's accounted for as bookings. Roblox recognizes those bookings as revenue over the following two years. For instance, if a player deposited $25 to buy Robux, Roblox would calculate it as revenue of $1 over 25 months. For Roblox, its revenue is arguably a lagging indicator, while its bookings inform future revenue trends.

That's partly why I note that revenue growth could fall further. Bookings fell 3% year over year in Q1 and 4% in Q2. Moreover, the average bookings per daily active user have fallen for four consecutive quarters. Players are depositing less money on Roblox. Unless it can turn this trend around soon, revenue growth could continue decelerating.

No reason to sell Roblox stock

Chart showing fall in Roblox's PS ratio since early 2022.

RBLX PS Ratio data by YCharts.

Still, the turnaround should not come as a surprise. The boom from the pandemic was inevitably going to reverse. Impressively, Roblox continues adding new players. Daily active users reached 58.5 million in July, 26% higher than the year before. Eventually, the headwinds from the economic reopening will end, and Roblox can return to a normalized growth rate.

Finally, the uncertainty about how far its losses will go is arguably priced into its stock. Roblox is trading near its lowest price-to-sales ratio in the previous few years. So while its risks are elevated in the near term, it's no reason to sell Roblox stock.