Latest news with #RBLX
Business Insider
19 hours ago
- Business
- Business Insider
Roblox Stock (RBLX) Drops on 'Perfect Place for Pedophiles' Lawsuit
Roblox (RBLX) stock took a beating on Friday after Louisiana Attorney General Liz Murrill filed a lawsuit against the video game platform. The lawsuit alleges that the failure of the company to develop safety protocols has created a platform that is the 'perfect place for pedophiles.' Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. The lawsuit takes issue with the age verification system on the platform, which allows users to easily lie about their age and access areas designed for children. Murrill argues the company's current system 'prioritizes user growth, revenue, and profits over child safety,' and that it has intentionally or recklessly created a platform that puts children in danger. Child safety is a major concern for Roblox, as roughly 20% of its users are age nine or under. With such a large audience made up of children, the company needs to be strict in how it manages content. However, it has failed to do so, with player-made content such as 'Escape to Epstein Island' and 'Diddy Party' being available on the platform. Roblox Blocks Predator Hunter Schlep The lawsuit from Attorney General Murrill comes in the same week as Roblox's ban of YouTuber Schlep. Schlep, who has over 600,000 subscribers, specifically hunted child predators on Roblox. His reports have resulted in several arrests. He was inspired to do this after he was allegedly groomed on the platform and was unsatisfied with Roblox's response. on Friday but remained up 101.81% year-to-date. The shares have also rallied 208.65% over the past 12 months. Is Roblox Stock a Buy, Sell, or Hold? Turning to Wall Street, the analysts' consensus rating for Roblox is Strong Buy, based on 16 Buy, three Hold, and a single Sell rating over the past three months. With that comes an average RBLX stock price target of $145.20, representing a potential 23.92% upside for the shares.
Yahoo
3 days ago
- Business
- Yahoo
RBLX Q2 Deep Dive: Viral Hits Drive User Growth, Guidance Highlights Monetization Shift
Gaming metaverse operator Roblox (NYSE:RBLX) missed Wall Street's revenue expectations in Q2 CY2025, but sales rose 20.9% year on year to $1.08 billion. Next quarter's revenue guidance of $1.14 billion underwhelmed, coming in 3.5% below analysts' estimates. Its non-GAAP loss of $0.41 per share was 7% below analysts' consensus estimates. Is now the time to buy RBLX? Find out in our full research report (it's free). Roblox (RBLX) Q2 CY2025 Highlights: Revenue: $1.08 billion vs analyst estimates of $1.10 billion (20.9% year-on-year growth, 2% miss) Adjusted EPS: -$0.41 vs analyst expectations of -$0.38 (7% miss) Adjusted EBITDA: $320.3 million vs analyst estimates of $220.3 million (29.6% margin, 45.4% beat) The company lifted its revenue guidance for the full year to $4.44 billion at the midpoint from $4.33 billion, a 2.6% increase Operating Margin: -29.8%, down from -26.6% in the same quarter last year Daily Active Users: 111.8 million, up 32.3 million year on year Market Capitalization: $89.8 billion StockStory's Take Roblox's second quarter results reflected strong user and engagement growth, as management emphasized the impact of several viral experiences and ongoing investments in platform quality, developer tools, and global infrastructure. CEO David Baszucki attributed the performance to robust creator activity and highlighted the emergence of new experiences such as Grow a Garden, which contributed to a broad-based lift in engagement and monetization across the platform. Baszucki noted, 'Our strength in Q2 was broad-based across the platform,' and pointed to record levels of both daily active users and monthly unique payers as evidence of this momentum. Looking ahead, Roblox's updated guidance is shaped by its belief in continued expansion of the creator ecosystem, AI-powered platform enhancements, and monetization diversification. CFO Naveen Chopra cautioned that guidance for the next two quarters reflects conservative assumptions around the sustainability of recent viral hits, as well as tougher year-over-year comparisons. Chopra stated, 'It's just too early to extrapolate Q2's extraordinary trends over a prolonged period of time,' but outlined confidence in the company's strategy to capture a larger share of the global gaming content market through technology investments and new monetization channels. Key Insights from Management's Remarks Management pointed to a combination of viral content, improved platform infrastructure, and expansion into new demographics and geographies as key drivers for the quarter and areas of focus for future growth. Viral content drives engagement: Experiences like Grow a Garden and 99 Nights in the Forest contributed to a surge in daily active users, with Baszucki noting that four out of the platform's five top hits launched within the last year. These titles not only attracted new players but also encouraged cross-engagement with other games, highlighting a healthy ecosystem. Developer ecosystem broadening: Chopra emphasized that more than half of the experience spending growth came from titles outside the top ten, signaling a wider distribution of earnings and opportunity for smaller creators. The new Creator Rewards program shifts incentives to reward developers who bring organic traffic and new users, aiming to further diversify and strengthen the content pipeline. AI and infrastructure investments: The company rolled out enhancements such as Cube 3D, a generative AI model for in-game assets, and continued to improve global server performance. These investments are intended to accelerate content creation and support rapid scaling as user numbers climb. International expansion gains traction: Management cited particularly strong growth in the Asia-Pacific region, attributing success to improved translation, localized infrastructure, and targeted content. Countries like Indonesia and Korea saw year-over-year bookings growth exceeding 100%. Shift in monetization models: Roblox is experimenting with new monetization tools, such as Rewarded Video ads (including through a partnership with Google), dynamic pricing, and IP licensing. The company sees these as critical to increasing revenue per user, especially among older demographics. Drivers of Future Performance Roblox expects continued user growth and content diversity to underpin its outlook, with a focus on expanding monetization and sustaining engagement as key priorities. Sustaining viral hit momentum: Management is cautious about projecting ongoing success from recent viral titles, assuming normalization in engagement and spending. However, they believe investments in discovery algorithms and creator incentives could foster repeatable viral content that drives further platform growth. Monetization diversification: The rollout of new ad formats, partnerships for IP licensing, and expanded creator monetization tools are expected to gradually increase revenue per user. Management highlighted opportunities to capture higher monetization rates among older users and through non-traditional gaming genres. Headwinds from tougher comparisons and uncertainty: Chopra referenced difficult year-over-year comps in the second half of the year and the unpredictability of viral trends. The company's conservative guidance reflects these risks, particularly regarding the durability of user engagement and the timing of new monetization initiatives. Catalysts in Upcoming Quarters In the coming quarters, the StockStory team will closely monitor (1) the sustainability of viral hit engagement and whether new experiences can replicate recent success, (2) incremental monetization from new ad formats and IP licensing, and (3) continued expansion into key international markets, especially in Asia-Pacific. Execution on AI-powered platform upgrades and creator incentive programs will also be critical signposts. Roblox currently trades at $129.50, up from $124.90 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it's free). Now Could Be The Perfect Time To Invest In These Stocks When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that's already erased most losses. Don't let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. 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Yahoo
4 days ago
- Business
- Yahoo
Roblox's DAU Momentum Builds: Is Monetization the Next Step?
Roblox Corporation RBLX continues to show strong traction in its user base, reinforcing the position as a leading immersive platform. In the second quarter of 2025, daily active users (DAU) surged 41% year over year to 111.8 million, while total engagement hours jumped 58% to 27.4 billion. Growth was broad-based across geographies and age groups, with particularly strong momentum in APAC (up 76% DAUs) and in users aged over 13 years (up 54%), who now make up more than 64% of the platform's user the monetization front, second-quarter bookings climbed 51% year over year to $1.4 billion, driven by both increased engagement and higher spend per user. Monthly unique payers hit a record 23.4 million (up 42% year over year), with a record 4.6 million new payers. Average bookings per payer rose 6%. Premium subscriptions continued to expand, contributing to recurring revenues, while immersive advertising — boosted by initiatives like Rewarded Video ads — gained traction as more brands used Roblox's 3D environments for marketing. In-experience purchases remained a core revenue driver, with both the number of paying users and average spend profitability remains constrained as Roblox continues to reinvest heavily in its creator ecosystem. Developer Exchange (DevEx) payouts hit a record $316.4 million in the second quarter, up 52% year over year, reflecting higher engagement and the company's commitment to its Creator Rewards program. While this strengthens the long-term content pipeline, it also keeps near-term margins under company's strategy hinges on converting its expanding DAU base into stronger monetization without sacrificing engagement quality. With continued innovation in ad formats, subscription offerings and virtual goods — plus rising traction in high-monetizing genres among older users — Roblox is building the infrastructure to scale monetization over time. The balance between user growth and monetization efficiency will be key in determining whether today's DAU momentum translates into meaningful earnings growth in the years ahead. RBLX's Price Performance, Valuation and Estimates RBLX's shares have gained 103.5% in the past six months compared with the industry's increase of 17%. In the same time frame, shares of other industry players, such as Take-Two Interactive Software, Inc. TTWO and Electronic Arts Inc. EA, have gained 9.2% and 34%, respectively. Image Source: Zacks Investment Research With the recent gain, RBLX is priced at a premium relative to its industry. Its forward 12-month price-to-sales ratio of 12.57 is well above the industry average. Meanwhile, Take-Two Interactive and Electronic Arts' forward 12-month price-to-sales ratios are 5.64 and 5.5, respectively. Image Source: Zacks Investment Research The Zacks Consensus Estimate for 2025 loss per share has widened to $1.71 in the past seven days. In 2024, the company reported adjusted loss per share of $1.44. Meanwhile, Take-Two Interactive and Electronic Arts' earnings in fiscal 2026 are likely to witness growth of 33.7% and 21.1%, respectively. Image Source: Zacks Investment Research RBLX currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report Electronic Arts Inc. (EA) : Free Stock Analysis Report Roblox Corporation (RBLX) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research 登入存取你的投資組合
Globe and Mail
6 days ago
- Business
- Globe and Mail
Thinking of Buying Roblox Stock? Here Are 2 Red Flags to Watch.
Key Points Roblox has long-term potential -- but the path is expensive. Roblox's valuation assumes near-flawless execution. Investors need conviction in the long game. 10 stocks we like better than Roblox › Roblox (NYSE: RBLX) has become a cultural phenomenon, boasting more than 100 million daily active users (DAUs) and a growing ecosystem of creators building immersive games and experiences. The company is often touted as a pioneer of the metaverse -- a new frontier for social interaction, entertainment, and digital commerce. But while the story is compelling, the financials tell a more cautious tale. As investors evaluate Roblox, it's critical to understand the risks beneath the surface. Here are two key red flags that deserve your attention before you buy the stock. 1. Roblox still isn't profitable, and that's not changing anytime soon Roblox is growing, but it's not profitable. In its latest quarter, the company reported a net loss of $280 million, continuing a long stretch of deep operating losses. To understand why, it helps to zoom out. Roblox isn't a game developer in the traditional sense. It runs a platform where developers build "experiences," players spend virtual currency (Robux), and the company takes a cut of the in-game economy. In many ways, it's trying to be the YouTube for interactive 3D content. That business model comes with real advantages: network effects, long-term engagement, and a scalable ecosystem. But it's also expensive to run. Roblox spends heavily on infrastructure to support real-time multiplayer capabilities across more than 100 million users, alongside constant investments in trust and safety. As the platform scales, developer payout grows as well, which consistently compresses margins. And on top of that, Roblox is pouring capital into the future -- from immersive avatars and AI tools to aging up the user base and expanding internationally. In short, Roblox is a business designed for growth, not for profit. And that's precisely the risk. So far, there's limited evidence of operating leverage. For example, developer exchange fees have increased -- from 21% of bookings in Q3 2023 to 22% in Q2 2025. That's moving in the wrong direction. The silver lining? Costs related to personnel as well as trust and safety declined slightly as a percentage of bookings over the same period. Bulls believe operating leverage will eventually kick in as new monetization streams, like immersive ads, scale and Roblox deepens its ecosystem. But until then, investing in Roblox assumes two things: It can continue growing at a high clip for many years. Scale will eventually fix the margin problem. That's possible, but far from guaranteed. 2. Roblox's valuation is pricing in a perfect outcome Despite its lack of profits, Roblox is trading at a premium, recently at roughly 21 times the price-to-sales (P/S) ratio. That's a lofty multiple, especially for a company with no generally accepted accounting principles (GAAP) earnings. A leading company like Alphabet trades at a P/S ratio of only 7. To be clear, high multiples aren't always a problem. For platform businesses with strong user economics, sticky ecosystems, and long-term monetization upside, paying up can make sense. But that logic only holds if the underlying business is moving decisively toward profitability and scale. That's where the tension lies. Despite its massive DAU base, Roblox is still struggling to turn a profit. Also, while average bookings per user (ABPU) have grown in recent quarters, the trend hasn't been consistent. For instance, ABPU declined 3% year over year in Q2 2023. Meanwhile, new monetization initiatives like immersive advertising and virtual commerce are promising but unproven, and international expansion is still early, with a low monetization rate. In other words, Roblox is trading like a mature platform, but it's still a company figuring out how to monetize its massive user base. This high valuation creates a narrow runway for execution. If bookings growth slows or if costs remain stubbornly high, Roblox's valuation multiple could compress sharply. In a market that's become increasingly sensitive to profitability and capital efficiency, that's not a risk to take lightly. What does it all mean for investors? Roblox is a bold bet on the future of interactive entertainment. The company is building more than just games -- it's laying the foundation for the metaverse. But the road ahead comes with real risks: persistent losses, an expensive business model, and a valuation that leaves little room for error. For investors, the decision comes down to conviction. If you believe Roblox can scale into a dominant platform with strong monetization and operating leverage, the long-term upside could be meaningful. But if execution falters, today's premium valuation could become hard to justify. Should you invest $1,000 in Roblox right now? Before you buy stock in Roblox, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks 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 $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025
Yahoo
03-08-2025
- Business
- Yahoo
This Video Game Stock Is Up Over 100% Year to Date. Can the Climb Continue?
Key Points Roblox is enjoying momentum in growing and monetizing a large user base. Morgan Stanley estimates that advertising could be a $1 billion annual revenue opportunity. There are risks to consider, but if the company executes its long-term objectives, the stock can certainly climb higher. 10 stocks we like better than Roblox › The video game industry has seen slower growth over the past few years, but this only makes Roblox's (NYSE: RBLX) performance stand out. The company's user-generated content strategy and social interactions between users have created a vibrant gaming platform. After blowing the lid off second-quarter expectations, management now expects full-year revenue to grow between 22% and 25% year over year. The stock is up about 10% after earnings, but is it still a buy at around $137? Factoring in the total shares outstanding, that equates to a market cap of $93 billion at the end of July. Roblox is a richly valued platform right now. Whether it can deliver satisfactory returns from here will depend on how much of the $180 billion spent annually on video games it can capture over time, in addition to capitalizing on other opportunities like advertising. Growing in the right ways Roblox's social-driven platform is clearly resonating with its user base. The biggest surprise in recent years is how the content is starting to attract users 13 years and older. For years, Roblox was a popular gaming platform for children, but as of the second quarter, there are now 71.4 million daily active users age 13 and up, compared to 61 million in the previous quarter. Its total player base surged to more than 111 million in Q2, up 41% year over year and marking back-to-back quarters of accelerating user growth. As the base ages up, these older players seem to be spending more time on the platform than the younger group. Total hours engaged on the platform have been steadily trending higher over the last two years. This reached 27 billion hours in Q2, up 58% year over year. As with any video game business these days, the strategy is to get players spending more time, and as they do that, they naturally spend more money. Players can buy virtual currency, or Robux, to buy digital items for their avatar, among other things. Given the growth in users and engagement, Roblox's revenue is soaring, up 21% year over year to $1.1 billion in Q2. These impressive numbers in the second quarter showcase why Roblox could be the future social media platform for young people. They get to hang out with others and express themselves through their digital avatars, while having fun in virtual worlds and gaming experiences. Over the long term, management believes it can capture 10% of annual game spending, which would translate to about $18 billion in annual revenue. But that's not all. Advertising is a huge opportunity Roblox's revenue opportunity could stretch into the fast-growing digital ad market. It has a partnership with Google Ads to scale immersive ad formats, including offering rewards to users in exchange for watching a video ad while playing games. The company's large and highly engaged user base will be valuable in tackling this opportunity. Morgan Stanley analyst Matthew Cost estimated that Roblox could generate $1.2 billion in ad revenue by 2026, and of course, that would be expected to grow over the long term and contribute to higher margins and free cash flow. Roblox is already a very profitable business, with management guiding for full-year free cash flow to reach $1 billion. The high margins from ads would only increase margins and free cash flow over the long term. Can Roblox justify its valuation? Roblox is benefiting from significant leverage on its operating costs, indicating that it's not done expanding margins. A company that is tapping into a large opportunity and delivering this much growth in free cash flow is going to command a rich valuation. Using 2025 guidance, the stock is trading at nearly 20 times forward sales and 94 times forward free cash flow. This is how I think about its valuation. If the stock suddenly fell 50% in the near term and traded at 50 times expected free cash flow, that would be a bargain for a company guiding for 60% year-over-year free-cash-flow growth for 2025. From that perspective, the stock looks appropriately valued. One risk that could hurt the stock is that Roblox does depend on a young demographic, and it's nearly impossible to know what teenagers are going to be into in 10 years. However, Roblox's growth will allow it to keep investing in other gaming genres and new features that appeal to an expanding demographic. And it's already proving it can expand its appeal beyond kids under 13. To answer the headline question, yes, if management delivers on its growth target, the stock can hit more new highs over the next five years. I don't see it as overvalued when it just crossed 100 million users and is growing over 40% year over year. Should you buy stock in Roblox right now? 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 $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roblox. The Motley Fool has a disclosure policy. This Video Game Stock Is Up Over 100% Year to Date. Can the Climb Continue? 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
