Roblox's (RBLX 10.29%) stock has more than doubled since the beginning of 2025. The gaming platform company attracted a lot of attention again as it gained more daily active users (DAUs), locked them in for more hours, and accelerated its bookings growth.
But even after that impressive rally, Roblox's stock remains about 12% below its all-time high from November 2021. Should investors buy it now and expect it to set new record highs?
Image source: Roblox.
Roblox's niche is still expanding
Roblox's gaming platform allows its users to create their own games with a simple block-based system that doesn't require any prior coding knowledge. They can share those games with other players and monetize them with an in-game currency called Robux.
Roblox's players can buy Robux on an a la carte basis or through discounted subscriptions, while creators can accumulate it and cash it in for real-world currencies. That creator-driven flywheel makes it more similar to Alphabet's YouTube than other gaming development platforms like Unity.
Roblox became a household name during the pandemic, when stay-at-home restrictions drove many tween creators and players to its platform. It experienced a slowdown in 2022 after it lapped that growth spurt, but it continued to expand by gaining older and overseas users. In 2023 and 2024, Roblox's total bookings (which mainly come from its Robux sales), DAUs, average bookings per DAU (ABPDAU), and total hours engaged all grew at a healthy rate.
|
Metric |
2021 |
2022 |
2023 |
2024 |
|---|---|---|---|---|
|
Bookings growth |
45% |
5% |
23% |
24% |
|
DAU growth |
40% |
23% |
22% |
21% |
|
ABPDAU growth |
4% |
(14%) |
0% |
2% |
|
Hours engaged growth |
35% |
19% |
22% |
23% |
Data source: Roblox.
Roblox's ABPDAU growth stabilized as it more effectively monetized its older and overseas users -- which initially generated lower bookings than its core tween users in the U.S. and Canada. It also expanded its advertising ecosystem as more brands launched metaverse experiences on its platform, which were more engaging than traditional ads.
That acceleration continued in the first quarter of 2025, as bookings increased 31% year over year, DAUs grew 26% to 97.8 million, ABPDAU improved 4%, and hours engaged climbed 30% to 21.7 million. For the full year, analysts expect bookings to grow 27% as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rises 47%. That robust growth counters the notion that Roblox was a pandemic-era fad.
Near-term catalysts and challenges
Roblox's near-term growth could be driven by its new breakout titles, including Grow a Garden and 99 Nights in the Forest; the expansion of its metaverse advertising platform; the rollout of its more advanced developer tools; and its overseas expansion. From 2024 to 2027, analysts expect Roblox's bookings and adjusted EBITDA to increase at a CAGR of 22% and 37%, respectively. With an enterprise value of $79 billion, the stock still seems reasonably valued at 12 times next year's bookings and 49 times its adjusted EBITDA.
However, Roblox is expected to stay unprofitable for the foreseeable future. It's ramping up its infrastructure spending to support its expanding platform, increasing its investments in stronger safeguards for its younger users, and will continue to subsidize salaries with high stock-based compensation expenses (which consumed 23% of its bookings in 2024). It will also continue to pay high developer exchange fees (the cash it pays its creators for trading in their Robux) to lock in its higher-value creators.
So is Roblox a no-brainer buy right now?
Roblox is still expanding at an impressive rate, but it hasn't proven its business model is sustainable yet. Its high debt-to-equity ratio of 24.1 (which includes over $1 billion in long-term debt) could also make it hard to raise fresh cash at reasonable rates. That might be why Robolox insiders also sold nearly nine times the number of shares they bought over the past 12 months. So while Roblox might keep growing over the next decade, I wouldn't call it a "no-brainer" buy right now. It could have a bright future, but investors should gradually accumulate shares instead of blindly chasing the recent rally -- which could easily fizzle out in a market downturn.
