TLDR
- Roblox (RBLX) stock has surged over 180% in the past year, reaching $126.16 with an $86B market cap
- Daily active users grew 41% year-over-year to nearly 112 million in Q2 2025, with 64% now over age 13
- Company posted $493 million net loss in first half of 2025 despite $2.1 billion revenue and strong free cash flow of $603 million
- Louisiana lawsuit alleges inadequate age verification processes, creating potential regulatory concerns
- Price-to-sales ratio has doubled since April to nearly 21, raising valuation concerns for investors
Roblox stock has climbed more than 180% over the past year, reaching $126.16 with a market capitalization of $86 billion. The gaming platform’s dramatic recovery comes after years of range-bound trading following a massive 2022 decline.
The company’s user base expansion has driven much of the recent investor enthusiasm. Daily active users reached nearly 112 million in the second quarter of 2025, representing 41% growth compared to the previous year.
This growth has shifted Roblox’s demographic profile in a meaningful way. Users aged 13 and over now represent 64% of the daily active user base, marking a departure from the platform’s traditional focus on children under 13.
The user growth has translated into revenue increases for the platform. First-half 2025 revenue exceeded $2.1 billion, up 25% from the same period in 2024.
Popular games like Grow a Garden have helped revive interest in the metaverse platform. Users purchase Robux, the platform’s virtual currency, to buy avatar upgrades and special abilities within games.
Financial Performance Shows Mixed Results
Despite revenue growth, Roblox continues to face financial challenges. The company recorded a $493 million net loss in the first two quarters of 2025, slightly higher than the $476 million loss during the same period in 2024.
Total costs and expenses reached nearly $2.7 billion in the first half, well above revenue levels. The company managed to limit expense growth to 20% while revenue increased 25%.
Free cash flow presents a more positive picture for investors. The metric reached $603 million in the first half of 2025, nearly doubling from year-ago levels.
Stock-based compensation expenses of $544 million and deferred revenue of $539 million help explain the disconnect between net losses and cash flow generation. These accounting factors make the company’s financial position appear stronger than net income figures suggest.
Management forecasts 2025 revenue between $4.39 billion and $4.49 billion. This would represent approximately 23% growth for the full year, consistent with current growth rates.
Legal Challenge Creates Uncertainty
A lawsuit filed by Louisiana’s state government presents a new challenge for the platform. The suit alleges Roblox lacks effective age verification processes, potentially allowing predators to misrepresent their age and target children.
Roblox has responded by highlighting over 40 safety features designed to protect children and empower parents and guardians. The company emphasizes its commitment to user safety across its platform.
The lawsuit’s impact on business operations remains unclear at this stage. However, it serves as a reminder of the regulatory scrutiny facing platforms with large youth user bases.
The timing of the legal challenge comes as Roblox has been working to expand its appeal to older demographics. The shift toward older users may help address some safety concerns while opening new revenue opportunities.
Valuation concerns have emerged alongside the stock’s dramatic rise. The price-to-sales ratio has reached nearly 21, more than doubling since April 2025.
While this valuation remains below post-pandemic peaks, it represents Roblox’s highest sales multiple since 2022. The rapid valuation expansion may give potential investors pause about entering positions at current levels.
The company’s long-term user retention potential remains a key investment thesis. Nearly 40% of current users are still under age 13, representing a demographic that could remain engaged with the platform for decades.
Gaming industry history suggests players who start young often continue playing well into adulthood. This pattern could provide Roblox with a stable, growing user base as current players mature and increase their spending power.
The platform’s ability to develop more sophisticated content for aging users will be crucial. Success in this area could unlock higher spending levels as today’s children become tomorrow’s wage-earning adults.
Current trading volume for Roblox stock stands at 132,845 shares, below the average volume of 9.1 million shares. The stock trades in a 52-week range between $37.50 and $150.59.
