Roblox's stock will almost return to the price of its debut.
Its growth is accelerating, but it is far from reaching a breakdown.
It looks valuable, but it still needs to prove that its business model is sustainable.
10 Better Stocks than Roblox ›
Rob Less (NYSE: RBLX) Once a popular stock. The game platform developer made its public release on March 10, 2021. Its stock began trading at $64.50, eventually more than doubled in a record $134.72 on November 19, 2021. At the time, investors were dazzled by its rapid growth, sticky ecosystem, its sticky ecosystem and its off-roading Tween Player.
But at the time of writing, Roblox's stock trades are about $70. It lost its luster because it occupied the pandemic-driven growth breakthrough, added more losses, and dealt with safety and regulatory issues. Will it eventually rebound and generate millionaire benefits over the next decade?
Roblox allows its users to create games and other experiences using a simple drag-and-drop system that does not require any prior coding knowledge. Its market also offers prefabricated assets and templates to further simplify the process. Its advanced users can use Lua, a popular scripting language for video games, to add more complex features.
Roblox creators can make money through the currency in the game called Robux. This creator-driven cycle provides growth for the platform's growth by attracting more players and driving them to buy more heists.
During the pandemic, Roblox's simplicity attracted many tween users, when most students stayed at home and spent a lot of time in front of computers. It is also building an advertising ecosystem as more and more brands build virtual “meta” worlds on their platforms.
If we look back at Roblox's growth in bookings, daily active users (DAU), average daily active users' average bookings (ABPDAU) and total hours, we'll see its growth in 2021's popularity driven by 2021 and emanating growth in 2021.
| Metric system | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Booking growth | 45% | 5% | twenty three% | twenty four% |
| dau growth | 40% | twenty three% | twenty two% | twenty one% |
| Abpdau Growth | 4% | (14%) | 0% | 2% |
| Hourly participation growth | 35% | 19% | twenty two% | twenty three% |
Source: Roblox.
But in 2023 and 2024, Roblox's booking growth has accelerated overseas again and attracted older creators and players. Booking volumes of these new DAUs are lower than their core audience of tween users in the U.S. and Canada, but their participation time is still rising. This stickiness may pave the way for higher Robux sales and stronger booking growth in the future.
Roblox bookings grew 31% in the first quarter of 2025. Its daus grew 26% to 97.8 million, its ABPDAU grew 4%, and its total hours jumped 30% to 21.7 billion. This acceleration refutes the bearish idea that it is a popular stock that will simply disappear and support the bullish idea that its creator-driven cycle will drive its long-term expansion.
Over the entire year, Roblox expects its bookings to grow 21% to 23%, as its adjusted interest, taxes, depreciation and amortization (EBITDA) will increase 14% to 47%. However, it remains unprofitable on the basis of accepted accounting principles (GAAP) - and it still spends a lot of money to strengthen its digital safeguards in exchange for cash-accumulated Robux from its creators (its “developer exchange fees”) and expands its cloud infrastructure.
Roblox has a market capitalization of $47.78 billion, with nine times booking deals this year. It's not bargaining, but it doesn't seem expensive if it can consistently increase reservations with double-digit numbers.
Currently, analysts expect their bookings to grow at a 20% compound annual growth rate (CAGR) from 2024 to 2027. Assuming it can maintain its eight-year growth rate in 2035, its annual bookings could reach $32.25 billion in 2035. If it still hits 9 times bookings, it will have a market cap of 6 times the box office, which will be $29.025 billion at 6 flow to Sight to 6fold to Sexfold to Sext to Sext to Sext of Sext of Seft of Sext of Sext of Sext of Sext of Seft to Seft to Seft to Seft to Seft of Sext of Sext of Sext of Sext of Sext of Seft to Seft to Seft to Seft to Sext of Sext of Sext of Sext of Sext of Sext to Seft to Seft to Seft of Sex of Sext of Sexter to $29.025 billion.
This gain could turn a $10,000 investment into over $60,000, but it may not generate millionaire manufacturers’ earnings unless you buy more stocks. If Roblox doesn’t balance the cost of protecting young users and expanding its cloud infrastructure with its top-level growth, it could also face more pain in the coming years.
Roblox may still be a good investment for patient investors, but it may not be a millionaire maker in the next decade. It has engraved a high-growth niche, but it needs to keep its platform safe and prove that its business model is sustainable if it is to grow into a larger company.
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Leo Sun has no position in any of the stocks mentioned. Motley Fool has a place and recommends Roblox. Motley Fool has a disclosure policy.
Can Roblox help you become a millionaire? Originally published by Motley Fool