RBLX Stock Trades at Premium Value: Should You Buy, Sell or Hold?

Roblox Corporation RBLX is currently trading at a forward 12-month price-to-sales ratio of 12.45X compared with the Zacks Gaming industry’s average of 3.67X and the broader Consumer Discretionary sector’s 2.22X.

P/S (F12M)

The stock has surged a staggering 234.5% over the past year, dwarfing the industry’s 41.1% growth and the S&P 500’s 18.1% rally. RBLX has outpaced other industry players like Electronic Arts Inc. EA, Monarch Casino & Resort, Inc. MCRI and Accel Entertainment, Inc. ACEL in the past year.

Price Performance

Potential Tailwinds Behind RBLX’s Rally

Roblox is benefiting from multiple strategic and operational initiatives that are driving growth across its user base and financial metrics. A major growth lever has been its international and demographic expansion.

Roblox posted exceptional second-quarter 2025 growth across key metrics, driven by both viral hits and a broad-based creator ecosystem. Bookings soared 51% year over year to $1.4 billion, with revenue rising 21%. Daily active users (DAUs) jumped 41% to 111.8 million, with notable strength in APAC (up 76%) and emerging markets like Indonesia, India and the Philippines. 

Engagement hit 27.4 billion hours, up 58% year over year, supported by growth among users above age 13, who now make up 64% of DAUs. The viral game Grow a Garden broke records with more than 20 million concurrent players and boosted engagement across other experiences; three-quarters of its DAUs played at least one additional game the same day.

Roblox’s monetization trends were also strong. Monthly unique payers reached an all-time high of 23.4 million, with 4.6 million payers added. Average bookings per payer grew 6%, and DevEx payouts to developers hit a record $316.4 million, up 52% year over year, showing creator earnings potential. Importantly, more than half of platform spending growth came from non-top-10 experiences, reflecting a healthy and diversified content ecosystem. The company also raised its yearly view, forecasting bookings growth of 34-37%.

Strategic initiatives are expected to support future growth. These include improved discovery algorithms, investments in global infrastructure, auto-translation quality, AI-powered 3D and text generation tools, expanded IP licensing partnerships, and new monetization formats like Rewarded Video ads via Google.

Roblox’s Creator Rewards program aims to incentivize bringing new users to the platform, while genre expansion into RPGs, sports, racing, and battle games is showing traction. Its strong balance sheet, with $4 billion in net liquidity, provides flexibility for investment.

RBLX Earnings Estimate Revision

The Zacks Consensus Estimate for fiscal 2025 and 2026 sales is pegged at $5.98 billion and $7.18 billion, up 37% and 19.9% year over year, respectively. Meanwhile, other industry players like Electronic Arts' sales in fiscal 2026 are likely to gain 7.1%, whereas Monarch Casino & Resort and Accel Entertainment's sales in 2025 are likely to witness year-over-year growth of 4.5% and 8.5%, respectively.

However, what is concerning is that the consensus estimate for RBLX’s 2025 and 2026 loss estimates has widened to $1.71 and $1.133, as shown in the chart.

What May Halt RBLX Rally?

Despite robust engagement and bookings, Roblox reported a loss per share of 41 cents, indicating ongoing profitability challenges. The company remains heavily reliant on a few breakout viral hits for outsized short-term boosts, creating potential volatility if such titles fade faster than expected. While Grow a Garden has strong early retention, management acknowledged uncertainty about its long-term sustainability and built conservatism into guidance.

The high DevEx payouts, while positive for creator incentives, also increase operating costs, and monetization per user still lags certain older-audience gaming genres. The company is in the early stages of building out advertising revenues, and the rollout of Google partnership initiatives will take time before contributing meaningfully. Additionally, fourth-quarter carries heightened uncertainty since a significant portion of bookings historically occurs in the final weeks of the quarter.

Operationally, Roblox faces the ongoing challenge of balancing rapid DAU and engagement growth with the infrastructure, safety and discovery investments needed to maintain quality at scale. The departure of key executive Manuel Bronstein, a major contributor to product and partnership growth, introduces some leadership transition risk. Finally, while international growth is impressive, it depends on maintaining momentum in translation quality, infrastructure expansion, and localized monetization strategies.

Overall, Roblox’s momentum is being fueled by a combination of viral successes, deeper engagement and a thriving creator ecosystem, but the business must manage profitability pressures, viral hit dependency and execution risks in scaling its platform globally.

How to Play the RBLX Stock?

Investors may want to avoid Roblox for now as the stock’s lofty valuation comes with persistent profitability challenges, reliance on a few breakout hits for growth and rising operating costs tied to generous creator payouts. While international expansion and user engagement remain strong, the sustainability of viral successes is uncertain, advertising initiatives are still in early stages, and leadership changes add execution risk.

The company’s need for heavy ongoing investment in infrastructure, safety and discovery features pressures margins, making it vulnerable if growth momentum slows. RBLX currently has a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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