Roblox Trades 15% Below Its 52-Week High: How to Play the Stock?

Roblox Corporation (RBLX) shares are currently trading about 15% below their 52-week high, raising questions about whether the recent pullback is a buying opportunity or a signal to stay cautious. The stock has shown resilience in expanding its user base and monetization strategies, but with volatility still in play, investors must weigh growth prospects against near-term risks before deciding how to position themselves.

The stock has also outperformed the industry in the past six months. Shares of Roblox have witnessed a 139.1% surge in the past six months compared with the industry and the S&P 500’s rallies of 31.9% and 16.6%, respectively.

In the past six months, other industry players like Electronic Arts Inc. (EA), Monarch Casino & Resort, Inc. (MCRI) and Accel Entertainment, Inc. (ACEL) have witnessed gains of 19.7%, 18.8% and 12.6%, respectively.

Price Performance

Factors Aiding RBLX

Roblox posted robust growth in second-quarter 2025, with bookings jumping 51% year over year and daily active users topping 111 million. Engagement climbed sharply as well, reflecting both rising user numbers and deeper time spent on the platform. A growing share of its community is now more than 13 years old, a sign that the company is successfully broadening its demographic reach.

Viral titles such as Grow a Garden have drawn in millions of new players, including older audiences, while international markets like India, Korea and Indonesia delivered triple-digit growth in some cases.

The platform’s creator economy is also strengthening, with record payouts supporting developer engagement. New monetization tools, ranging from advertising partnerships with Google to licensing deals with well-known brands, are expanding revenue opportunities. Backed by a strong balance sheet and cash flow, Roblox is positioning itself to capture a larger slice of the global gaming market.

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.

The company also continues to nurture a thriving developer ecosystem. Payouts to creators reached a record $316 million in the quarter, with opportunities extending beyond just the top-performing titles. Viral hits such as Grow a Garden and Dress to Impress have attracted millions of new players, while also encouraging cross-play into other games, creating a healthier overall ecosystem.

Roblox is also innovating at the platform level with investments in AI-driven tools, enhanced safety features and advanced personalization, all of which are expected to fuel long-term engagement. In addition, new partnerships with brands like Netflix and Sega, along with Google’s advertising integrations, are opening fresh monetization avenues.

Combined with a strong balance sheet of nearly $4 billion in liquidity, these developments give Roblox the flexibility to pursue its ambition of capturing a meaningful share of the global gaming market.

What May Hurt the Rally?

Despite the impressive top-line momentum, Roblox remains unprofitable, with losses continuing in second-quarter 2025. Management acknowledged that part of the recent strength has been driven by blockbuster hits, and while viral content has been a catalyst, the durability of such games remains uncertain.

Titles like Brookhaven have demonstrated staying power, but others have faded quickly, raising questions about how sustainable newer successes like Grow a Garden will be over time. Roblox also faces tougher year-over-year comparisons in the coming quarters, which may tamper growth rates as management has already guided with caution.

Infrastructure is another challenge. Supporting record concurrent users, surpassing 30 million, requires substantial investment in servers and cloud resources, which may pressure margins. Meanwhile, many of the company’s newer monetization efforts, such as advertising, sponsored discovery and Creator Rewards, are still in early stages and may take time before they materially move the profitability needle.

Competition across gaming platforms remains intense, particularly as Roblox pushes into genres like RPGs and shooters, wherein incumbents are strong. Additionally, as a platform with a large youth audience, Roblox must continue to prioritize safety and regulatory compliance, areas that pose both financial and reputational risks.

RBLX’s Earnings & Sales Estimates

The Zacks Consensus Estimate for fiscal 2025 and 2026 sales is pegged at $5.98 billion and $7.18 billion, suggesting 37% and 19.9% year-over-year growth, 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 rallies of 4.5% and 7.1%, respectively.

The consensus estimate for RBLX’s 2025 and 2026 loss estimates has been unchanged in the past 30 days, as shown in the chart.

RBLX Trades at a Premium

Roblox is currently valued at a premium compared with the industry on a forward 12-month P/S basis. RBLX’s forward 12-month price-to-sales ratio is 12.19, significantly higher than that of the industry. The company is trading at a premium compared with other industry players like Electronic Arts, Monarch Casino & Resort, and Accel Entertainment.

P/S (F12M)

Wrapping Up

Roblox has delivered remarkable growth, with an expanding user base, deeper engagement and strong momentum from viral content, while broadening its reach to older demographics and international markets. The company is strengthening its ecosystem through record creator payouts, brand partnerships, and ongoing innovation in AI and monetization tools, which position it well for long-term expansion.

However, the stock already trades at a premium compared with peers, profitability remains elusive, and much of the recent surge has been tied to blockbuster hits whose durability is uncertain. With heavy infrastructure costs, early-stage monetization models, and tougher comparisons ahead, the near-term risk-reward looks less favorable.

For these reasons, existing investors may consider holding their positions to benefit from Roblox’s growth runway, while new investors may find it prudent to wait for a more attractive entry point. RBLX carries a Zacks Rank #3 (Hold) at present. 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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