Key Takeaways
- Roblox stock fell 19% in a week after guiding holiday-quarter bookings below expectations.
- Daily users fell 9% from a year earlier, and Roblox expects negative adjusted EBITDA this quarter.
- Roblox’s guide assumes a hit from Take-Two Interactive’s Grand Theft Auto VI, which launches Nov. 19.
- The stock trades well below its usual sales multiple, but bookings need to grow again before it’s a buy.
Roblox (RBLX) stock fell 19% in the week through Oct. 30. Friday’s 18% drop did most of the damage, after its third-quarter report guided holiday bookings below expectations.
CFO Naveen Chopra said the guide allows for “a modest headwind from the release of GTA in the quarter.” He meant Grand Theft Auto VI, which Take-Two Interactive (TTWO) launches on Nov. 19.
A Beat, Then a Holiday Guide That Fell Short
Third-quarter bookings of $1.7 billion topped the $1.62 billion Wall Street expected, though they fell 12% from a year earlier. Daily users fell 9%, to 138 million, but rose 12% from 123 million in the second quarter.
For the fourth quarter, Roblox expects bookings of $1.89 billion to $2 billion. That’s 10% to 15% below last year’s and under the $2.02 billion analysts had penciled in. At the midpoint, it’s a 12.5% decline, about the same as the third quarter’s 12%, so the guide doesn’t call for the slide to get worse.
Take-Two needs that launch. Its net bookings fell 3% in the June quarter, and it’s counting on GTA VI to reach its $8 billion to $8.2 billion forecast for the year to March 2027. If its holiday guide on Nov. 9 calls for a blockbuster, is “modest” the right word for Roblox?
Spending Into the Slump
Roblox expects adjusted EBITDA of -$70 million to -$10 million this quarter as it spends more on AI infrastructure and marketing to adults. Its $6.2 billion of cash and investments covers that easily: even the low end of its fourth-quarter free cash flow guide, -$190 million, is about 3% of it.
Going in, analysts expected losses to shrink slowly, from $1.54 a share in 2025 to $0.94 in 2028:
A holiday quarter of negative adjusted EBITDA makes cuts to those estimates more likely.
TIKR Tracks 35 Analysts on Roblox. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Roblox, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Roblox’s Analyst Ratings
Roblox Stock Is Cheaper, but the Holidays Come First
Roblox traded at 5.3x forward sales on the eve of the report, against a five-year average of 7.7x:
Friday’s drop takes it to about 4.3x on pre-report estimates, not far above the 3.5x low it hit on July 31. Lower sales estimates after the guide would push that back up.
If you own Roblox, I’d hold. The slide isn’t speeding up, retention is at its best since 2021 and there’s plenty of cash, so selling at this multiple looks late. But I’d wait for bookings to stop shrinking before loading up.
Of course, Roblox usually books much of its holiday quarter in the last week of December, and it beat the top of its own range in the third quarter, so the early-February report could still surprise.
So What Is Roblox Stock Actually Worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
