Where Will Roblox Stock Be In 5 Years?

At the turn of the decade, Roblox management claimed that over half of American children under 16 had used the Roblox (NYSE: RBLX) app. The subsequent few years only served to drive subscriber growth higher for the popular gaming platform, and it hasn’t slowed down much.

Roblox reported a 25% increase in average Daily Active Users (DAU) compared to the same quarter last year. But the stock hasn’t been nearly as popular as the app. Since the company’s IPO in March 2021, shares are down 61.5% and are trading well off the all-time high of $134.

In a year where tech stocks have rallied, RBLX is down over 3% to around $26.80. That includes a sell-off that came after the 2nd quarter earnings. While there were positive indicators for the company, investors were concerned by net losses that are continuing to pile up.

But the company still increased its revenue and subscribers and the stock could be poised to break out. So where will Roblox stock be in 5 years?

What Is Roblox Stock Prediction for 2025?

Out of 29 analysts who’ve logged predictions for Roblox stock, 16 of them recommend to buy RBLX and 2 forecast the stock will outperform the market over the coming year. 7 analysts rate Roblox as a hold.

The most bullish analyst believes the stock could have a 101.5% upside and reach $54 over the next year. The consensus forecast is still positive, with shares estimated to rise by as much as 38% to $37 over the next 52 weeks.

There are 6 sell ratings on RBLX with the lowest estimate forecasting the stock could drop by as much as 32.8% to $13 over the next year.

While there’s a wide gap between the highest and the lowest estimate, the majority of analysts believe that the stock has a good chance to outperform the market heading into 2025.

How Much Will Roblox Stock Cost in 2030?

The long-term success of the company lies in expanding the company’s product offerings and user base. To that end, Roblox just announced a continuation of its partnership with Claire’s to offer unique rewards and limited-release items to the app’s users.

Roblox has pushed to expand to users who are over 17. The 17-24 demographic is growing fast for the company and Roblox has begun offering unique content for users who have verified that they are over 17. 

Given the strong growth and the potential to reach older users, it’s highly likely that the company could substantially increase its $16.5 billion market capitalization by 2030.

RBLX has already traded much higher and, considering a 25% increase each year, which is more conservative than the median price forecast, it’s not hard to imagine RBLX topping $125 in 2030.

What Is The Future of Roblox Stock?

While there are substantial reasons to expect Roblox stock to rise, there are also some concerns for the future. The main concerns are that the company’s rapid growth will stagnate due to changing customer demand or competition. 

The company’s major competitor is Fortnite, and the two companies are competing to be the leader in user-generated gaming. Many industry experts believe that gaming platforms will adopt a model that’s similar to YouTube. Roblox is winning the race at the moment, with 250 million users compared to Fortnite’s 70 million.

Because many of the games on Roblox are user-developed, a portion of the game’s revenue go to the developer. But Roblox currently lags Fortnite in this aspect, with only 25% of game sales going to the creators. Fortnite gives back 40% of all of its profits to its developers. That’s a concern because some Roblox game developers might take their talents elsewhere.

What Is A Fair Price for Roblox Stock?

The company has a Price to Sales ratio of 6.75, which on its own might indicate the stock is slightly overvalued. But when compared to gaming industry peers, RBLX seems to be trading at a fair price.

The company had strong financials in its 2nd quarter of 2023 earnings release, including revenue of $680 million, a 15% increase from last year.

Coupled with increases in bookings and subscribers, it’s a healthy sign for the company. Roblox users were engaged for 14 billion hours in the quarter, a 24% increase from last year.

There were certainly enough positives to support the stock at this price point, and even higher.

Is Roblox a Risky Stock?

It wasn’t all rosy in the second quarter, and that’s why investors didn’t rush to buy in. A net loss of $282.8 million was a stunning 60% increase from $176.4 million in the same quarter of 2022. 

While Roblox still has over $520 million in cash and cash equivalents to lean on, it’s concerning that spending is outpacing the company’s growing revenue. And even though Roblox had substantial revenue growth, it was right in line with expectations.

There are certainly risks in investing in Roblox, as evidenced by the sharp losses early investors took over the past few years. But there are still reasons to be bullish on RBLX.

Is Roblox a Buy?

Roblox is a popular gaming and game creation app that offers a growing platform for its many users to connect. After the company’s highly anticipated IPO, RBLX share price soared above $100. However, mounting losses have raised concerns about the company’s long-term prospects.

Roblox has increased revenue and subscribers, and it’s continued to separate itself from the competition. There is plenty of opportunity for growth in the 17-24 segment to meet future demand.

While there are risks in buying RBLX, most analysts agree that the stock is likely to start an upward climb over the coming year. Five years from now, investors who were willing to take a chance on Roblox could be rewarded considerably.

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