Roblox Corporation (RBLX): what the price requires
At today's price, Roblox Corporation (RBLX) is priced for today's economics sustained for ~9.8 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/RBLX
Headline
| Field | Value |
|---|---|
| Ticker | RBLX |
| Company | Roblox Corporation |
| Current price | $55.13/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | revenue-multiple |
| EV / sales paid | 7.8x |
| Steady-state operating margin assumed | 30.2% |
| Must persist for | 9.8y |
The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.
Solve inputs: computed at a 12% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.
Reconcile: at the x-ray's 9.3% required return this reads ~24.6%/yr; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | -0.33σ |
| sustained it ~9.8 years at this level | 15% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | — | 0 | — |
| Earnings | 6.83x | 2 | expensive |
| Relative | 0.93x | 2 | justifies |
| Growth | 0.69x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.9%); the inversion above states its own rate.
Per-Model Detail (n=7)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $109.32 | 0.50x | yes | FCF base $1.9B, growth 25% (input: historical growth), terminal g 4.0%, WACC 8.9%, 7yr projection |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $59.55 | 0.93x | yes | P/S fallback (negative EPS): Sector P/S 8.0x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $0.64 | 86.14x | yes | Book value floor: BV/sh $0.64, ROE negative (excluded from median) |
| Two-Stage Excess Return | Asset | $0.57 | 96.72x | yes | Book value with convergence: BV/sh $0.64, ROE converges to ke (excluded from median) |
| Discounted Future Market Cap | Growth | $79.99 | 0.69x | yes | Rev $5.3B, growth 30% (input: historical growth; tapered), Terminal P/S: 5.9x / 7.4x / 8.9x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | $61.08 | 0.90x | yes | Margin ramp: -21% → 22% over 7yr, rev growth 30% (input: historical growth; tapered) |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | $22.32 | 2.47x | yes | FCF $1524.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $4.93 | 11.18x | yes | SBC-adj FCF $0.38B (FCF $1.52B − SBC $1.15B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $59.55 | 0.93x | yes | Revenue $5.30B × sector P/S 8.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $2.0b |
| Interest coverage | -28.7x |
| Share count CAGR (dilution) | 4.9% |
| Burning cash | no |
Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.
Bullet Takeaways
Roblox does not yet earn an operating profit, so the price is set against sales. At roughly 5.4 times revenue near $51.51 (as of June 27, 2026), the price implies the business eventually reaches an operating margin around 30% and grows revenue at its self-funding ceiling for about six years. That is an elevated bet: only about a quarter of comparable fast-growers have sustained such a run.
The balance sheet is the strong point. Net cash sits near $2.0 billion with about $3.2 billion of liquid assets, so the company is not capital-constrained. The catch is dilution: reported free cash flow near $1.5 billion shrinks to roughly $0.4 billion once stock-based compensation of about $1.15 billion is netted against it.
The engagement story just cracked. Daily active users grew 35% to 132 million in the latest quarter, but management cut full-year bookings guidance on safety measures and signaled users could contract sequentially. The moat is the creator network; the question is whether engagement is stalling.
Bull Case
Read through the capital-allocation lens and Roblox looks like a platform investing from strength. It sits on net cash near $2.0 billion and about $3.2 billion of liquid assets, so it funds its product roadmap, infrastructure, and safety investments from its own balance sheet rather than the capital markets. Reported free cash flow is roughly $1.5 billion, evidence that the underlying booking economics convert to cash even while the income statement shows a loss, because that loss is driven by non-cash stock-based compensation rather than cash burn.
The asset being funded is a genuine two-sided network. Roblox is a user-generated-content platform where creators build the experiences and earn payouts, and the moat is the size of that creator economy. The company's filing reports that "over 24,500 and 16,500 developers and creators were qualified and registered in our Developer Exchange Program" at the end of 2024 and 2023 respectively (FY2024 10-K, accession 0001315098-25-000033), a base that grew sharply year over year. More creators draw more users, and more users draw more creators, the classic flywheel that is hard for a competitor to replicate from scratch.
The top-line momentum is still strong. In the latest quarter revenue grew 39% to about $1.4 billion, bookings rose 43% to about $1.7 billion, and daily active users grew 35% to 132 million. Roblox is also pushing into new monetization (advertising, older demographics, commerce) that could lift the per-user economics the revenue-multiple price is paying for. For the bull, this is a scaled, cash-generative network whose price has already come down sharply from its highs, where the relative and growth methods (price-to-sales near $60, perpetual-growth DCF near $110) sit at or above the current quote, and where the margin-ramp the price embeds is plausible if engagement keeps compounding.
Bear Case
The previously defensible advantage now being chipped away is the one thing the entire valuation rests on: engagement growth. Roblox cut its full-year 2026 bookings growth guidance to 8% to 12%, attributing the reduction to safety measures, and management signaled that daily active users could contract sequentially from the first to the second quarter. The sign-up funnel that fed the flywheel has stalled. For a revenue-multiple stock priced on a margin ramp that requires years of sustained growth, a slowing or shrinking user base is not a soft quarter; it is the assumption breaking. The market repriced it accordingly, with the stock falling sharply from triple-digit territory toward the low $50s.
The safety overhang is structural, not transient. The headwinds management cites stem from trust-and-safety measures on a platform whose core users are young, and that exposes Roblox to regulatory scrutiny, platform-policy constraints, and reputational risk that can directly throttle growth. A network whose growth can be capped by its own necessary safety controls has a moat with a built-in governor, and the price does not reflect that governor.
The dilution makes the cash story weaker than it looks. Reported free cash flow near $1.5 billion collapses to roughly $0.4 billion once stock-based compensation of about $1.15 billion is subtracted, and the share count has been growing nearly 5% a year. So the per-share economics are far thinner than the headline cash flow suggests, and shareholders are being diluted while the business is not yet profitable on a GAAP basis. The methods that anchor to current economics are unusable or near-zero (book value per share under a dollar, negative return on equity), which is the model's way of saying there is no asset or earnings support beneath the price. The reasonable-value band runs from roughly $29 to $38, all below the current quote. Strip out the assumption that engagement reaccelerates and the margin ramp arrives, and the price is a bet on a flywheel that just showed it can slow.
Valuation
Because Roblox is not yet earning a normal operating profit, the price is set against sales, not earnings. At roughly 5.4 times revenue near $51.51, the inversion implies the business eventually reaches an operating margin around 30% and grows revenue at its self-funding ceiling for about six years, computed at an 11.9% cost of capital. Each one-point change in the cost of capital moves the implied horizon about 1.7 years. The near-term growth rate is within recent history; the priced-in assumption is elevated because of how long the growth and the margin expansion must both persist, and only about a quarter of comparable fast-growers have sustained such a run.
The usable methods are limited by the lack of profitability. The growth and relative families carry the read: perpetual-growth DCF near $110, discounted-future-market-cap near $75, the margin-trajectory method near $61, and price-to-sales near $60. The asset and earnings methods are unusable or near-zero: book value per share under a dollar, negative return on equity, and a share-based-compensation-adjusted FCF value near $5 once the roughly $1.15 billion of stock compensation is netted out. The blended central estimate is about $60, and the reasonable-growth band runs from about $29 at the low to $38 at the base.
The reconciliation: the price is justified by the relative-multiple and growth-DCF methods on the assumption that revenue keeps compounding and margins eventually ramp, while the earnings methods say the business is far from supporting the price on current economics. One measurement note: the trailing operating figure used in the inversion and the EDGAR quarterly measure diverge sharply here, so treat the 5.4x revenue multiple as approximate. The balance sheet (net cash near $2.0 billion) removes solvency risk, but the dilution from stock-based compensation is the quiet drag on per-share value, and the recent guidance cut puts the durability of the growth assumption directly in question.
Catalysts
The defining recent catalyst was the latest quarterly report and guidance cut. Revenue grew about 39% to $1.4 billion, bookings rose about 43% to $1.7 billion, and daily active users grew 35% to 132 million, with EPS of -$0.35 beating the -$0.41 expected. But management cut full-year 2026 bookings growth guidance to 8% to 12% (from a higher prior range) citing safety measures, and signaled users could contract sequentially into the next quarter. That repricing drove a sharp stock decline, and the next print's read on daily active users and bookings is the single most important catalyst for the thesis.
The key swing factor is engagement direction: whether the sign-up funnel reaccelerates or the user base contracts as management warned. Because the price is a revenue-multiple bet on sustained growth plus an eventual margin ramp, any inflection in DAU and bookings moves the stock most.
The other catalysts to track are the new monetization initiatives (advertising, older-demographic growth, commerce) that could lift per-user economics, and the trust-and-safety and regulatory developments that are currently constraining growth. Stock-based compensation and the resulting dilution are the ongoing drag to monitor against the strong headline cash flow.
Sources: Roblox Q1 2026 results and guidance (tech-insider.org, QuiverQuant, Investing.com, MarketBeat consensus), FY2024 10-K developer-exchange disclosures.
Peer Cohorts (Per Segment, With Filing Citations)
Roblox (single segment) (reported)
- TTWO (TAKE TWO INTERACTIVE SOFTWARE INC)
- (no filing in the citation store)
- U (UNITY SOFTWARE INC.)
- (no filing in the citation store)
- EA (ELECTRONIC ARTS INC.)
- (no filing in the citation store)
- APP (AppLovin Corp)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.