RBLX · Roblox
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $61.03
Note written ·
Price against the kill line
18.2% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $61.03, on record since 11 November 2026. The shares are up 31.6% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $61.03, 16% above the last close (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 29 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,572
- Revenue, change on a year (%)
- +15.6
- Gross margin (%)
- 79.8
- Operating margin (%)
- −18.0
- Free cash flow, four quarters ($M)
- 1,568
- Net cash, cash less debt ($M)
- 2,187
- Enterprise value to sales (×)
- 5.7
- Free-cash-flow yield (%)
- 4.4
All filed numbers
What Roblox reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,572 | +15.6 | 79.8 | −18.0 |
| first filed | 1,469 | +35.9 | 80.1 | −15.6 |
| first filed | 1,442 | +39.3 | 79.6 | −20.4 |
| first filed | 1,415 | +43.2 | 77.7 | −25.3 |
| first filed | 1,360 | +48.0 | 78.2 | −21.8 |
| first filed | 1,081 | +21.0 | 78.2 | −29.8 |
| Pre-tax income ($M) | −229 |
| Net income ($M) four quarters: −972 | −227 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +2.7 |
| Operating cash flow ($M) | 1,949 |
| Capital spending ($M) | 381 |
| Free cash flow ($M) | 1,568 |
| Cash and short-term investments ($M) | 3,196 |
| Debt ($M) non-current long-term debt plus short-term borrowings | 1,009 |
| Net cash, cash less debt ($M) | 2,187 |
| Deferred revenue ($M) +23.8% on a year | 7,040 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 497 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | −1.0 |
| Market value ($M) | 35,732 |
| Enterprise value, market value plus net debt ($M) | 33,545 |
| Enterprise value to sales (×) | 5.7 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | Not meaningful |
| Free-cash-flow yield (%) | 4.4 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.6% of shares outstanding sold short, 2.3 days of average trading to cover, −6.8% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $7.7M |
| 12 monthsfrom | $0 | $91.4M |
The thesis
Roblox Corporation beat the top of its own third-quarter bookings guide, but daily users fell year over year for the first time and fourth-quarter bookings are guided down again, so the shares need the next report to show users stabilising. The adjusted close was $51.19 on 10 November 2026, against $53.28 on 28 October 2026, the session before the report.
Roblox reported bookings of $1.697 billion on 29 October 2026, above the $1.576–1.653 billion range it had guided, per company figures carried by GGRecon and Crypto Briefing. Daily active users (DAUs) were 138 million, up 12% from the prior quarter but down 9% year over year, GGRecon reported. Management guided Q4 bookings down 10–15% year over year. The story is well known: the story is well known, the 29 October 2026 report removed the main near-term event, and the shares fell about 16% the following session, per GGRecon.
Bullish and bearish views on Roblox Corporation
The bull case on Roblox Corporation (RBLX), in brief: bookings beat the guided range. The bear case: daily users fell year over year for the first time.
Bull case
- Bookings beat the guided range. Q3 bookings of $1.697 billion, down 12% year over year, finished above the $1.653 billion top of the guide, per Roblox's 29 October 2026 results as reported by Crypto Briefing. The bookings floor was $1.576 billion.
- Users rebounded from the prior quarter. DAUs of 138 million compare with 123 million in the quarter ended 30 June 2026, per the Q2 shareholder letter and GGRecon's Q3 figures. The Q3 threshold of 123 million was cleared.
- The loss was narrower than expected. Q3 adjusted loss per share was $0.32 against a $0.40 consensus estimate, per a Benzinga headline on 29 October 2026.
- Older users are growing fastest. Users over 18 were 29% of age-checked daily players worldwide and 37% in the US, per the Q3 report as summarised by Crypto Briefing on 30 October 2026.
- Several analysts kept Buy ratings after the report. Needham reiterated Buy with a $55 target on 30 October 2026. Citigroup kept Buy and cut its target to $55, and B. Riley kept Buy and raised its target to $51, both on 2 November 2026.
Bear case
- Daily users fell year over year for the first time. GGRecon reported on 30 October 2026 that Q3 DAUs of 138 million were down 9%, hours engaged fell 15% and monthly unique payers fell 16%.
- Guidance points to another decline. Roblox guided Q4 bookings down 10–15% year over year on 29 October 2026, and said DAUs should fall seasonally between Q3 and Q4, per a Benzinga headline.
- Margins are under pressure from AI and infrastructure spending. Stocktwits reported on 30 October 2026 that the CEO defended a margin decline during the sell-off and pointed to AI and infrastructure costs.
- Price targets came down after the report. JP Morgan (Neutral) cut its target to $46 on 31 October 2026, and DA Davidson (Neutral) cut to $48 on 2 November 2026. BTIG (Sell) cut to $37 and StoneX (Sell) cut to $32, both on 30 October 2026.
- Regulation and litigation keep widening. Norway said on 19 October 2026 it plans to cover gaming platforms such as Roblox in a ban on social media for under-16s. The EU designated Roblox a Very Large Online Platform on 31 August 2026, and the Ohio Attorney General moved to lead securities class actions on 10 August 2026.
- AI game-creation tools compete for creators. Google and Unity launched an AI platform for building games on 7 October 2026, per Benzinga.
Price setup
The adjusted close was $51.19 on 10 November 2026. That is 51.4% below the 52-week high of $105.36 and 34.9% above the close three months earlier. The 14-day relative strength index (RSI), a momentum gauge on a 0–100 scale, reads 47.6, which is neutral.
The reference level is the 4 September 2026 close of $43.31, which preceded the September rally. The close of $51.19 is above that level. MarketBeat reported on 2 November 2026 a consensus rating of Hold and an average analyst target of $53.35.
Targets after the report span $32 (StoneX) to $55 (Citigroup and Needham). Past reports have moved the shares sharply: Roblox fell 18.33% after the Q1 2026 report and 15.51% after the Q3 2025 report, per a 247wallst preview dated 25 October 2026. The 29 October 2026 report added a fall of about 16%, per GGRecon.
Catalysts ahead
- ~February 2027 (est.): Q4 and full-year 2026 results. Shows whether daily users and bookings land inside the guided 10–15% Q4 bookings decline and whether full-year guidance returns.
What would change the view
A daily close above $61.03, 16% above the last close (11 November 2026), would show the shares leading the S&P 500 and prove this call wrong.
What it trades with
No current theme carries Roblox. Its shares fell on 30 October 2026 alongside a Nasdaq drop of more than 3%, per Benzinga, so broad technology moves are part of the daily pattern. Unity Software is the closest listed read-across on AI game-creation tools, as both stocks moved on the 7 October 2026 AI platform launch and Unity's 9 October 2026 analyst upgrades. Two events are too few to measure a correlation.
The evidence, claim by claim (8)
- Q3 2026 bookings were $1.697 billion, down 12% year over year, above the top of the $1.576–1.653 billion guidance range; revenue rose 16% to about $1.57 billion. Roblox Q3 2026 results, via GGRecon and Crypto Briefing · as of
- Q3 2026 daily active users were 138 million, down 9% year over year and up 12% from the prior quarter; hours engaged fell 15% and monthly unique payers fell 16%. GGRecon, Roblox daily players fall for the first time · as of
- Roblox guided Q4 2026 bookings down 10–15% year over year. GGRecon and Benzinga headline on the 29 October 2026 report · as of
- Q3 2026 adjusted loss per share was $0.32 against a $0.40 consensus estimate. Benzinga headline · as of
- Shares fell about 16% the session after the Q3 report. GGRecon · as of
- MarketBeat reported a consensus rating of Hold and an average analyst price target of $53.35. MarketBeat · as of
- JP Morgan cut its target to $46 (Neutral); DA Davidson cut to $48 (Neutral); Citigroup cut to $55 (Buy); B. Riley raised to $51 (Buy). Benzinga analyst actions · as of
- Adjusted daily close $51.19; 52-week high $105.36; three-month price change 34.9%; RSI(14) 47.6. Split/dividend-adjusted daily closes · as of
Sources