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Roblox Stock Down 38% in 3 Months: Buy the Dip or Sell More?
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Key Takeaways
RBLX slid 38% in three months as a cautious growth outlook and rising costs hurt sentiment.
RBLX margins face pressure from higher creator payouts, infrastructure spend and a weaker monetization mix.
RBLX's engagement surged, with DAUs up 70% YoY and Q3 bookings jumping to $1.92B.
Roblox Corporation (RBLX - Free Report) has seen a sharp 38% decline over the past three months compared with the industry’s fall of 11.1%. However, in the same time frame, the S&P 500 has gained 3.3%.
RBLX stock has fallen largely due to concerns around slowing growth visibility into 2026, margin compression from heavier investments and fears that exceptional recent growth will be hard to sustain against tough comparisons. Management signaled that while platform momentum remains strong, increased spending on creator payouts, infrastructure and safety initiatives could weigh on profitability in the near term. Combined with uncertainty around monetization efficiency and regional mix shifts, investors recalibrated expectations, triggering a sharp pullback even as user engagement and bookings continued to surge.
In the past three months, other industry players like Electronic Arts Inc. (EA - Free Report) , Monarch Casino & Resort, Inc. (MCRI - Free Report) and Accel Entertainment, Inc. (ACEL - Free Report) have outperformed RBLX.
Price Performance
Image Source: Zacks Investment Research
Why RBLX Stock Declines So Sharply
One of the biggest triggers for the selloff was management’s cautious tone on forward visibility. While Roblox reaffirmed its long-term objectives, executives stopped short of providing specific 2026 growth targets. Investors interpreted this as a signal that bookings growth could moderate next year, especially following an exceptionally strong 2025. With expectations running high, even a hint of deceleration was enough to pressure the stock.
Roblox is intentionally increasing spending across several fronts. The company raised its developer exchange rate by 8.5%, pushing more economics to creators. At the same time, it is investing heavily in infrastructure, AI capabilities, safety systems and personnel. Management explicitly noted that margins could decline slightly in 2026 as these costs ramp faster than near-term revenue leverage, which weighed on investor sentiment.
While user growth is accelerating globally, much of that growth is coming from emerging markets, particularly in APAC. These regions monetize at lower rates compared to North America and Europe. As a result, blended metrics like bookings per payer and bookings per DAU have come under pressure, even though engagement is booming. This divergence between usage growth and monetization raised concerns about near-term revenue quality.
Roblox is rolling out stricter safety measures, including AI-based age estimation and higher age thresholds for certain content. While management believes these initiatives will enhance long-term trust and platform durability, it acknowledges they could create short-term friction in engagement and bookings. Markets often discount near-term disruption more heavily than long-term benefits, contributing to the stock’s decline.
Factors Aiding Roblox Stock
Despite the stock pullback, Roblox’s operating performance remains exceptional. In third-quarter 2025, daily active users surged to 151.5 million, up 70% year over year, while total engagement hours jumped 91%. Importantly, the 13-and-over demographic is growing even faster, signaling progress toward an older, potentially higher-value user base. This expanding and maturing audience strengthens Roblox’s long-term monetization potential.
In third-quarter 2025, bookings rose 70% year over year to $1.92 billion, far outpacing most gaming peers. Creator earnings continue to scale rapidly, with DevEx payouts hitting record levels and growing 250% over two years. A healthy creator economy is critical to sustaining content innovation, user retention and long-term platform relevance.
Roblox is embedding AI deeply across discovery, safety and content creation. Technologies such as Cube 3D/4D, real-time content generation and advanced recommendation systems are designed to unlock new genres like shooters, sports and RPGs. These initiatives expand the company’s addressable market beyond its traditional core, supporting management’s ambition to capture a much larger share of global gaming over time.
Advertising remains a relatively under-monetized opportunity. While management is cautious in the near term, early tests of rewarded video ads show promise. As engagement deepens and the user base ages, Roblox has multiple levers — ads, commerce, subscriptions and virtual economies — to improve monetization without sacrificing user experience.
RBLX’s Earnings & Sales Estimates
The Zacks Consensus Estimate for 2025 and 2026 sales is pegged at $6.64 billion and $8.1 billion, indicating 51.9% and 22.1% year-over-year growth, respectively.
Meanwhile, other industry players like Electronic Arts' sales in fiscal 2026 are likely to gain 9.5%, whereas Monarch Casino & Resort and Accel Entertainment's sales in 2025 are likely to witness a year-over-year rise of 4.2% and 7.8%, respectively.
The consensus estimate for RBLX’s 2025 loss estimates has narrowed in the past 30 days, as shown in the chart.
Image Source: Zacks Investment Research
RBLX Trades at a Premium
Roblox is currently valued at a premium compared with the industry on a forward 12-month P/S basis. RBLX’s forward 12-month price-to-sales ratio is 6.66, significantly higher than that of the industry. The company is trading at a premium compared with other industry players like Electronic Arts, Monarch Casino & Resort and Accel Entertainment.
P/S (F12M)
Image Source: Zacks Investment Research
Wrapping Up
RBLX’s selloff reflects a reset in expectations rather than a deterioration in its core business, supporting a Zacks Rank #3 (Hold) position for existing investors. User engagement, creator activity and long-term platform potential remain strong, but near-term uncertainty has risen as the company steps up spending on creators, safety and infrastructure, pressuring margins and clouding growth visibility.
With monetization still evolving and the stock trading at a premium despite these headwinds, upside appears limited in the short run. Long-term investors can stay invested in the platform’s growth story, but new buyers are better off waiting for clearer earnings leverage or a more attractive entry point.
Image: Bigstock
Roblox Stock Down 38% in 3 Months: Buy the Dip or Sell More?
Key Takeaways
Roblox Corporation (RBLX - Free Report) has seen a sharp 38% decline over the past three months compared with the industry’s fall of 11.1%. However, in the same time frame, the S&P 500 has gained 3.3%.
RBLX stock has fallen largely due to concerns around slowing growth visibility into 2026, margin compression from heavier investments and fears that exceptional recent growth will be hard to sustain against tough comparisons. Management signaled that while platform momentum remains strong, increased spending on creator payouts, infrastructure and safety initiatives could weigh on profitability in the near term. Combined with uncertainty around monetization efficiency and regional mix shifts, investors recalibrated expectations, triggering a sharp pullback even as user engagement and bookings continued to surge.
In the past three months, other industry players like Electronic Arts Inc. (EA - Free Report) , Monarch Casino & Resort, Inc. (MCRI - Free Report) and Accel Entertainment, Inc. (ACEL - Free Report) have outperformed RBLX.
Price Performance
Image Source: Zacks Investment Research
Why RBLX Stock Declines So Sharply
One of the biggest triggers for the selloff was management’s cautious tone on forward visibility. While Roblox reaffirmed its long-term objectives, executives stopped short of providing specific 2026 growth targets. Investors interpreted this as a signal that bookings growth could moderate next year, especially following an exceptionally strong 2025. With expectations running high, even a hint of deceleration was enough to pressure the stock.
Roblox is intentionally increasing spending across several fronts. The company raised its developer exchange rate by 8.5%, pushing more economics to creators. At the same time, it is investing heavily in infrastructure, AI capabilities, safety systems and personnel. Management explicitly noted that margins could decline slightly in 2026 as these costs ramp faster than near-term revenue leverage, which weighed on investor sentiment.
While user growth is accelerating globally, much of that growth is coming from emerging markets, particularly in APAC. These regions monetize at lower rates compared to North America and Europe. As a result, blended metrics like bookings per payer and bookings per DAU have come under pressure, even though engagement is booming. This divergence between usage growth and monetization raised concerns about near-term revenue quality.
Roblox is rolling out stricter safety measures, including AI-based age estimation and higher age thresholds for certain content. While management believes these initiatives will enhance long-term trust and platform durability, it acknowledges they could create short-term friction in engagement and bookings. Markets often discount near-term disruption more heavily than long-term benefits, contributing to the stock’s decline.
Factors Aiding Roblox Stock
Despite the stock pullback, Roblox’s operating performance remains exceptional. In third-quarter 2025, daily active users surged to 151.5 million, up 70% year over year, while total engagement hours jumped 91%. Importantly, the 13-and-over demographic is growing even faster, signaling progress toward an older, potentially higher-value user base. This expanding and maturing audience strengthens Roblox’s long-term monetization potential.
In third-quarter 2025, bookings rose 70% year over year to $1.92 billion, far outpacing most gaming peers. Creator earnings continue to scale rapidly, with DevEx payouts hitting record levels and growing 250% over two years. A healthy creator economy is critical to sustaining content innovation, user retention and long-term platform relevance.
Roblox is embedding AI deeply across discovery, safety and content creation. Technologies such as Cube 3D/4D, real-time content generation and advanced recommendation systems are designed to unlock new genres like shooters, sports and RPGs. These initiatives expand the company’s addressable market beyond its traditional core, supporting management’s ambition to capture a much larger share of global gaming over time.
Advertising remains a relatively under-monetized opportunity. While management is cautious in the near term, early tests of rewarded video ads show promise. As engagement deepens and the user base ages, Roblox has multiple levers — ads, commerce, subscriptions and virtual economies — to improve monetization without sacrificing user experience.
RBLX’s Earnings & Sales Estimates
The Zacks Consensus Estimate for 2025 and 2026 sales is pegged at $6.64 billion and $8.1 billion, indicating 51.9% and 22.1% year-over-year growth, respectively.
Meanwhile, other industry players like Electronic Arts' sales in fiscal 2026 are likely to gain 9.5%, whereas Monarch Casino & Resort and Accel Entertainment's sales in 2025 are likely to witness a year-over-year rise of 4.2% and 7.8%, respectively.
The consensus estimate for RBLX’s 2025 loss estimates has narrowed in the past 30 days, as shown in the chart.
Image Source: Zacks Investment Research
RBLX Trades at a Premium
Roblox is currently valued at a premium compared with the industry on a forward 12-month P/S basis. RBLX’s forward 12-month price-to-sales ratio is 6.66, significantly higher than that of the industry. The company is trading at a premium compared with other industry players like Electronic Arts, Monarch Casino & Resort and Accel Entertainment.
P/S (F12M)
Image Source: Zacks Investment Research
Wrapping Up
RBLX’s selloff reflects a reset in expectations rather than a deterioration in its core business, supporting a Zacks Rank #3 (Hold) position for existing investors. User engagement, creator activity and long-term platform potential remain strong, but near-term uncertainty has risen as the company steps up spending on creators, safety and infrastructure, pressuring margins and clouding growth visibility.
With monetization still evolving and the stock trading at a premium despite these headwinds, upside appears limited in the short run. Long-term investors can stay invested in the platform’s growth story, but new buyers are better off waiting for clearer earnings leverage or a more attractive entry point.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.