Roblox (RBLX): Taking Stock of Valuation as Child Safety and Regulatory Scrutiny Drive Conversation

Roblox (RBLX) has been getting a lot of attention recently as debates heat up about the platform’s approach to child safety. The company’s public handling of these concerns and its new age check features are under increased scrutiny.

See our latest analysis for Roblox.

Roblox’s year has been dramatic, with controversies over safety and new communication controls sparking investor debate. After a climb earlier in 2025, momentum has faded. This is reflected in a 57.6% share price return year-to-date, but a much stronger 84.98% total shareholder return over the past year highlights the longer-term potential many see, despite short-term swings and headline volatility.

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With legal battles, headline volatility, and impressive guidance all in play, is the current share price reflecting the risks and rewards, or should investors see Roblox as an overlooked opportunity before optimism returns?

Most Popular Narrative: 36.5% Undervalued

With Roblox’s fair value estimated at $146.02, well above the recent close of $92.73, the market may be missing some powerful growth levers underpinning the bulls’ case. The valuation narrative points directly to expectations of margin expansion, top-line acceleration, and premium multiples capturing the company’s long-term potential.

The evolving digital economy on Roblox, including expanded monetization opportunities like digital goods, Rewarded Video ads, and a systematized IP licensing marketplace, is expected to unlock new high-margin revenue streams and enhance net margins as adoption matures. Success in increasing the share of older users (with 64% of DAUs over 13, and viral hits skewing older) positions Roblox to tap into higher-monetizing demographics, supporting higher ARPU and improved topline growth prospects.

Read the complete narrative.

Curious why analysts think future margins will surge? The fair value rests on ambitious assumptions about robust earnings growth and a premium profit multiple rarely seen in this sector. Wondering what projections back that confidence? Hit the full narrative to uncover the financial drivers fueling this price target.

Result: Fair Value of $146.02 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained increases in developer payouts or unexpectedly high infrastructure costs could quickly compress margins and challenge the bullish outlook seen so far.

Find out about the key risks to this Roblox narrative.

Another View: Pricing Risks and Rewards

While some investors see deep value in Roblox, comparing its price-to-sales ratio to industry benchmarks reveals a more cautious picture. At 14.6x, Roblox trades far above the US Entertainment industry average of 1.3x and its peer average of 4.1x. That is also substantially higher than the fair ratio of 5.6x, signaling that the stock carries elevated valuation risk if the market re-bases expectations. Is the premium justified, or are investors overlooking the downside?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Roblox Narrative

If the consensus view does not reflect your thinking, or you would rather dive into the numbers yourself, building your own perspective takes just a few minutes. Do it your way

A great starting point for your Roblox research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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