- Fair Value Estimate
: $55.00 - Morningstar Rating
: ★★★ - Morningstar Economic Moat Rating
: Narrow - Morningstar Uncertainty Rating
: Very High
Roblox RBLX had a terrible second quarter across virtually every engagement and payment metric, resulting in bookings growing only 8% year over year, after averaging at least 19% each quarter since 2022 and 55% last year. Management expects the third quarter to be weak and suspended full-year guidance.
Why it matters: Roblox’s valuation depends on continued growth in user engagement and monetization. Everything took a step backwards this quarter, and growth is now in question.
- Roblox had only 123 million daily active users during the quarter, down from a peak of 152 million in the third quarter of 2025, marking the third straight sequential decline. Monthly unique players have followed a similar trend and were down to 27 million from a peak of 37 million two quarters ago.
- Management attributed the weak metrics in large part to the lack of viral games and consumer gravitation toward games with less monetization opportunity. We don’t doubt this is true, but this also leads to the conclusion that Roblox does not control—and will have difficulty—achieving the 20% annual top-line growth it expects over the long term.
The bottom line: We anticipate reducing our $55 fair value estimate by $5-$10, due to weaker near-term bookings than we anticipated and a slower cadence of margin expansion.
- We already projected much lower sales growth than management did, with only about 10% annually throughout our 10-year forecast, with midteens growth through the rest of this decade dropping to single digits after 2030.
- Just as we cautioned against assuming that last year’s blowout results were likely to be maintainable, we think it’s premature to assume Roblox cannot revive user and monetization growth. We simply believe that results will continue to be volatile, and the stock overreacts in both directions.
Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
The author or authors do not own shares in any securities mentioned in this article.
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