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Yahoo
14 hours ago
- Business
- Yahoo
Roblox Stock: Buy, Hold, Sell?
Roblox has been growing well over the last few quarters. The gaming company is riding a few tailwinds. However, its stock is priced at a premium right now. 10 stocks we like better than Roblox › Roblox's (NYSE: RBLX) stock has been unstoppable of late, up by 185% in the past 12 months. A series of strong financial results have caught investors' attention, causing many Roblox observers to change their view on the game developer's prospects. But as the stock price has almost tripled, what is the right thing for investors to do now? Let's explore further. Roblox has been executing on a high level in recent quarters. Initially, it demonstrated the sustainability of its growth and business model by returning to its growth trajectory after a brief slowdown in 2022, following the reopening of the economy after the height of the COVID-19 pandemic. It then went on to deliver accelerating growth rates in the coming quarters, which has completely surprised investors. It has grown its daily active users (DAU) for its gaming platform from 66.1 million in the first quarter of 2023 to 97.8 million in Q1 2025. Particularly, users above 13 years old grew at a much faster pace than those below 13 years old, suggesting that Roblox has been successfully expanding its reach. Understandably, quarterly hours engaged surged from 14.5 billion to 21.7 billion during that period. Solid growth in the user base led to sustained improvements in revenue, with quarterly revenue increasing from $655 million in Q1 2023 to $1.035 billion in Q1 2025. It's also worth noting that quarterly free cash flow increased from $82 million to $427 million during that period. Roblox has also made some strategic moves that could be game-changing in the long run, including its partnership with Google Ads and the introduction of its generative AI system, Cube 3D, which enables creators to generate 3D assets from simple text prompts in seconds. No wonder investors are excited! Roblox might have been delivering some solid performance, but investors care more about the sustainability of its growth. For that to happen, Roblox must continue to expand its content, attract and retain an ever-growing user base, and diversify its monetization strategies. To this end, the tech company is surfing a few tailwinds that could help sustain its growth ambition. First, it has been expanding its user base beyond its young cohort to include older users. It could do so by retaining its young users as they grow older, and also diversifying its content offerings to cater to the different needs of this cohort. Additionally, Roblox is actively expanding beyond its core regions into fast-growing countries in the Asia Pacific and Latin America regions, opening up significant market opportunities in countries such as Japan and India. It is localizing content, partnering with regional brands, and investing in cloud infrastructure to serve these markets better. Moreover, the growing adoption of artificial intelligence (AI) technologies will help accelerate Roblox's growth strategy. For instance, AI can help content creators create high-quality content more efficiently and cost-effectively, which in turn helps grow Roblox's content offerings. AI can also help improve Roblox's operational effectiveness and efficiency, which could lead to improvements in areas such as cost control and safety monitoring. Still, investors should be mindful that there are risks that could prevent the company from achieving its full potential. These risks include uncertainties surrounding the development of the metaverse -- areas such as technology, regulation, consumer habits, competition, and poor execution. In short, there is a huge growth opportunity ahead, so it's up to the company to execute well to capture a share in this growing metaverse market. While it's now clearer that Roblox is not just another wannabe tech company but one with a proven operating model and prospects for growth, investors should not rush to buy its stock, at least not until they consider the company's valuation. As of the time of writing, Roblox has a price-to-sales (P/S) ratio of 17.2. That's significantly higher than its larger peer Meta Platforms' P/S ratio of 10.7. Roblox's premium valuation is not entirely unjustifiable. It's a smaller company, so it may have bigger growth prospects ahead. Still, Meta Platforms is well-established, highly profitable, and has huge ambitions to dominate in the metaverse industry. Roblox is a proven growth company that's well-positioned to sustain its growth in the coming years. While there are still uncertainties surrounding how the metaverse will unfold, Roblox is committed to continuing to execute in order to reach its long-term goal of 1 billion users. If it can continue to grow its ecosystem -- with more content and improved monetization -- it will have a good chance of succeeding. The downside is that much of the optimism has already been priced into the stock, so buying it today is not a prudent move. Those who already own the stock can consider holding on to it to benefit from the growth prospects. But new investors must have a high conviction before paying up for Roblox's stock. Before you buy stock in Roblox, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Roblox wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Roblox. The Motley Fool has a disclosure policy. Roblox Stock: Buy, Hold, Sell? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Roblox (RBLX) Advances While Market Declines: Some Information for Investors
Roblox (RBLX) ended the recent trading session at $102.65, demonstrating a +1.51% change from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily loss of 0.03%. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq gained 0.13%. The online gaming platform's shares have seen an increase of 23.75% over the last month, surpassing the Consumer Discretionary sector's loss of 0.61% and the S&P 500's gain of 0.6%. The investment community will be paying close attention to the earnings performance of Roblox in its upcoming release. It is anticipated that the company will report an EPS of -$0.38, marking a 18.75% fall compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.19 billion, up 24.4% from the year-ago period. For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of -$1.4 per share and a revenue of $5.36 billion, representing changes of +2.78% and +22.67%, respectively, from the prior year. Investors should also take note of any recent adjustments to analyst estimates for Roblox. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook. Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system. The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.64% higher. Roblox is currently sporting a Zacks Rank of #3 (Hold). The Gaming industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 98, finds itself in the top 40% echelons of all 250+ industries. The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Ensure to harness to stay updated with all these stock-shifting metrics, among others, in the next trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Roblox Corporation (RBLX) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Roblox momentum is building for long-term growth, says analyst
-- Roblox's content and monetization strategy is gaining traction, setting the stage for sustained long-term growth, according to Oppenheimer. The firm reiterated its Outperform rating on Roblox and raised its price target to $125 from $80 a share, citing growing confidence in the platform's user engagement and monetization roadmap. 'Increasing content velocity, robust technology infrastructure, global reach, and a deep bench of under-utilized monetization features make RBLX a compelling investment,' Oppenheimer analysts wrote. Despite a 76% stock price increase since April 10, the firm believes there is still more upside. This week, Oppenheimer hosted virtual fireside chats with five leading Roblox studios. Among them was Splitting Point Studios, the developer behind Grow a Garden, which Oppenheimer said became the world's most popular game over the past weekend. "Based on conversations with studio leaders, it is clear that Roblox's recommendation algorithm has evolved to rapidly identify new trends and content creators, and scale them to a growing global user base at a faster pace," said Oppenheimer. These discussions reinforced analyst optimism about Roblox's 'sustainable user growth momentum, rewarded ad revenue potential, and long-term market share gain potential from other gaming platforms.' Oppenheimer now sees upside to both its second-quarter 2025 and full-year 2026 estimates. The firm declared, 'Momentum is building for long-term growth,' and that it believes Roblox is well-positioned to grow its share of the global gaming market over the coming years. Related articles Roblox momentum is building for long-term growth, says analyst Uber and Lyft stock fall after Waymo applies for NYC testing permit Amex likely to hike Platinum card fees as Chase ups the ante, says BofA Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
4 days ago
- Business
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Oppenheimer Thinks Roblox Stock Can Rise Back to Multiyear Highs
Oppenheimer raised its price target for Roblox shares to $125, a number its shares haven't been near since late 2021. The analysts said the gaming platform's algorithm will give it an edge in identifying trends in an era where studios act more like game publishers, than creators. Roblox shares have surged this year as the platform's Grow a Garden game attracted record numbers of of Wall Street's biggest Roblox bulls sees its shares hitting highs not seen in years. Oppenheimer on Wednesday raised its price target for Roblox Corp. (RBLX) stock from $80 to $125, a level the shares haven't hit since late 2021. The online gaming platform has 'a better solution to user growth and user retention than most game publishers,' Oppenheimer wrote. Roblox is unlikely to discover another Grow a Garden, a blockbuster, agricultural-themed game that Roblox bought a stake in when it had a promising number of players, analysts said. At one point, 16.4 million users were simultaneously playing Grow a Garden, surpassing Fortnite's peak concurrent player count, according to The New York Times. But Roblox's recommendation algorithm will likely give it an edge in the TikTok era, where gaming 'trends emerge organically' and studios must 'play catch-up,' Oppenheimer said. Studios are moving toward 'a game publisher model, where they spend more time on identifying trends and scouting and investing in promising creators, than developing inhouse games,' the analysts said. Oppenheimer's price is well above the $85.31 average of analysts who follow the online gaming platform and who were polled by Visible Alpha. Roblox was recently up about 1% to a bit over $102, having gained more than 75% so far this year. Read the original article on Investopedia Sign in to access your portfolio
Yahoo
09-06-2025
- Business
- Yahoo
Jim Cramer on Roblox (RBLX): 'I Think It's Terrific'
We recently published a list of . In this article, we are going to take a look at where Roblox Corporation (NYSE:RBLX) stands against other stocks that Jim Cramer discusses. During the episode, Cramer showed bullish sentiment toward Roblox Corporation (NYSE:RBLX) and called it 'terrific.' 'There's no real theme to the other stocks on the list… Then there are two one-offs, Roblox and Mosaic. The game of Roblox is something that fascinates kids. It may be too much for all I know, but the point is it's insanely popular. It's done nothing but go up ever since it was attacked by short seller[s]. I gotta tell you, I think that it's cleaned up its act. I think it's terrific.' Roblox (NYSE:RBLX) provides a platform for creating, sharing, and experiencing immersive 3D content, offering tools for developers and infrastructure services to support user-generated virtual experiences and real-time interaction. On March 22, 2024, Cramer said that he was waiting for the stock to take off and believed that 'it is taking off.' He remarked: 'Let's talk about Roblox, the online gaming and game creation platform that's insanely popular with kids. 71.5 million daily active users in the latest quarter but because they never pivoted to profitability, yet, the stock hasn't gotten as much love as I think it should've… It's the beginning of the great re-acceleration. Daily average users up 22%, hours engaged up 21%, revenues up 30%, bookings up gigantically. […] I've been waiting for this one to take off — it is taking off.' A person taking lessons through Roblox Education, expanding their knowledge and skills. Since the above comment was aired, Roblox (NYSE:RBLX) stock has gained nearly 160%. Overall, RBLX ranks 12th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of RBLX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
