Key Takeaways
- Roblox stock gained 15% this week to $49, nearly matching analysts’ $49.33 average target after its post-earnings plunge.
- Roblox guided fourth-quarter bookings down 10% to 15% and expects negative adjusted EBITDA as it spends on AI and adult users.
- Take-Two expects about 20% bookings growth this fiscal year as Grand Theft Auto VI launches Nov. 19, in the same holiday quarter Roblox guides down.
- Roblox’s early February report will show whether GTA VI and Google and Unity’s new AI game creation platform are pulling players and creators away.
Roblox (RBLX) stock gained 15% this week, closing Friday at $49. That wins back most of the ground lost on Oct. 30, when a soft holiday guide sent shares down 18% in a day.
Nothing in Roblox’s own news explains the bounce. The only notable filing was another insider sale, with director Gregory Baszucki reporting about $758,000 of stock sold on Wednesday.
Now the stock sits almost exactly on analysts’ $49.33 average target. So the easy part of the recovery may already be behind it.
The holiday quarter also brings a heavyweight rival. Take-Two Interactive (TTWO) launches Grand Theft Auto VI on Nov. 19 and expects fiscal 2027 net bookings of $8.0 billion to $8.2 billion, about 20% growth. Roblox is guiding its own bookings down as much as 15%.
Bookings shrank less than feared
Roblox’s third quarter, reported Oct. 29, beat its own forecast:
- Revenue rose 16% to $1.57 billion.
- Bookings fell 12% to $1.70 billion, above the top of guidance.
- Daily active users dropped 9% to 138 million, though they climbed 12% from the second quarter.
The outlook undid all of it. Roblox expects fourth-quarter bookings of $1.89 billion to $2.0 billion, down 10% to 15% and below the roughly $2.02 billion analysts had penciled in.
Reported revenue will look healthier for a while. Most bookings get recognized over about 27 months, so sales still carry last year’s boom…
That lag cuts both ways. Analysts’ revenue estimates now have to absorb a year of shrinking bookings, and the drag shows up in 2027.
Retention rose while payers fell
CEO David Baszucki pointed to “tough compares” with 2025 and said Roblox “achieved the highest seasonally adjusted overall platform retention since 2021.”
Payers haven’t followed. Average monthly unique payers fell 16% to 30 million, although bookings per payer rose 5%.
Adults are the bright spot. Users 18 and older made up 37% of U.S. age-checked daily users, up from 33% in the second quarter.
The fight for creators is heating up too. Roblox shares fell on Oct. 7 after Google and Unity Software (U) announced an AI-powered game creation platform, a direct challenge to Roblox’s own AI building tools.
Chasing them costs money now. CFO Naveen Chopra pointed to higher AI infrastructure costs and more marketing aimed at adults, and Roblox guided fourth-quarter adjusted EBITDA to between negative $70 million and negative $10 million. That follows a positive $138 million in the third quarter.
Free cash flow is guided to negative $105 million to negative $190 million. When did a quarter last look like that?
With $6.2 billion of cash and investments, Roblox can fund a negative quarter easily. Whether the spending restarts bookings growth by 2027 is the harder question.
TIKR tracks 34 analysts on Roblox. How many say “Buy”?
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27x EBITDA for shrinking bookings
Roblox trades at 4.5x forward revenue and 27.4x forward EBITDA, a premium built on years of fast bookings growth. Here’s how its sales multiple stacks up against Take-Two and Unity:
That premium only holds if bookings grow again.
Two near-term risks could delay that. Chopra said the guide builds in “a modest headwind from the release of GTA.” Its predecessor, GTA V, has sold more than 200 million units, so the sequel is a real draw on holiday time and money. Short seller Bleecker Street Research is also betting against the stock, citing child safety and slowing user growth.
Legal pressure hasn’t eased either. Users alleging childhood sexual abuse are fighting Roblox and Discord’s bid to push their claims into arbitration. Norway also plans to keep under-16s off social media and games it considers “harmful.”
My take: this week’s bounce looks like relief after an overdone selloff, and I wouldn’t chase it. At the Street’s own target and 27x EBITDA, Roblox needs proof that adults and AI tools can restart spending, so I’d hold and wait.
The fourth-quarter report, expected in early February, is that proof point. Bookings near the $2.0 billion top of the range would show retention turning into revenue. A print near $1.89 billion would suggest GTA won the holidays.
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 stocks mentioned. Thank you for reading, and happy investing!
