Roblox Corporation (RBLX): A Bull Case Theory

We came across a bullish thesis on Roblox Corporation (RBLX) on Substack by SuperJoost. In this article, we will summarize the bulls’ thesis on RBLX. Roblox Corporation (RBLX)’s share was trading at $70.77 as of May 6^th.

A person taking lessons through Roblox Education, expanding their knowledge and skills.

Roblox reported a strong first quarter for 2025, outperforming guidance across all key metrics and showcasing the strength of its platform and strategic direction. Revenue surged to $1.03 billion, reflecting 29% year-over-year growth, while bookings rose 31% to $1.21 billion. User engagement also showed impressive momentum, with daily active users reaching 97.8 million (up 26%) and total hours engaged hitting 21.7 billion (up 30%), indicating deepening platform stickiness. Although the company reported a net loss of $216.3 million, its underlying fundamentals tell a different story, as Roblox delivered record-setting cash performance, generating $443.9 million in operating cash flow (up 86%) and $426.5 million in free cash flow (up 123%). Management credits these results to a combination of strategic platform investments—particularly in monetization, the virtual economy, and search/discovery features—while successfully managing infrastructure and headcount expenses to drive margin improvements. Roblox continues to expand monetization through newer channels such as advertising, recently partnering with Google to introduce rewarded video ads, and is scaling its user-generated content (UGC) program. The platform’s economy is thriving, as creator earnings reached an all-time high of $281.6 million. More than 100 developers earned over $1 million in the last year, and the top 100 averaged $6.7 million in earnings, a 35% year-over-year increase. The top 10 creators earned an average of $36 million, up 28% from the prior year. These figures highlight the growing economic opportunity within Roblox’s ecosystem, reinforcing its position not just as a gaming platform but as a full-fledged digital economy. With accelerating top-line growth, record free cash flow, rising creator income, and expanding monetization levers, Roblox appears well-positioned to sustain its momentum.

Roblox Corporation (RBLX) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held RBLX at the end of the fourth quarter which was 52 in the previous quarter. While we acknowledge the risk and potential of RBLX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RBLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.