Meet the Monster Stock That Continues to Crush the Market
Key Takeaways
This gaming stock is up by more than 100% this year and could be just getting started.
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4 min read
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investment
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July 27, 2025
08:22 AM
The Motley Fool
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What caught my attention is Gaming platform developer Roblox (RBLX 0. 59%) has been one of the best-performing nology stocks of 2025
S have gained 107% year to date and now command a market cap of more than $80 billion
Roblox has been making excellent gress in its, but is it still a good time to buy (this bears monitoring)
On the other hand, Is there enough growth potential left in the to justify a valuation of more than 21 times sales
Moreover, Here's an overview of why Roblox has been such a strong performer and what could help take the company -- and the stock -- to the next level
Image source: Getty Images (fascinating analysis)
Why has Roblox stock performed so well
First and foremost, Roblox reported surprisingly strong first-quarter earnings
The company reported a 31% year-over-year increase in bookings, and as I'll discuss in the next section, user growth was extraordinary
Plus, the company's path to fitability is becoming much er, with a swing to positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), compared to a $31 million loss a year ago
There have been some other exciting developments as well
However, In mid-July, Roblox announced the launch of a new licensing platform, enabling content creators and intellectual perty (IP) holders to collaborate, in today's financial world
However, Initial partners include Netflix and Lionsgate, so this could end up being a big revenue driver
Furthermore, However, In addition, several analysts have issued bullish calls on Roblox in recent months (noteworthy indeed)
To be sure, I'll never buy a stock solely because of an analyst upgrade, but this is certainly helping vide upward momentum here
However, Does Roblox still have room to grow
In the first quarter, Roblox reported stellar 26% year-over-year growth in its user base, which was a significant acceleration from the 19% growth rate reported in the prior quarter
The platform now has 97
Nevertheless, 8 million daily active users (DAU), with more than 20 million making purchases at least monthly
For one thing, Roblox has stated that its long-term vision is to scale to 1 billion users (roughly one-third of the global gaming population)
Plus, the number of paying users is growing at a faster pace (29% year over year in Q1) than the overall user base, indicating that Roblox and its partners are doing a solid job of creating content that people are eager to pay for, in light of current trends
Moreover, However, Recently, Roblox Chief duct Officer Manuel Bronstein said that the company's goal is to have "10% of all gaming content revenue flowing through the Roblox ecosystem. " The global gaming market is estimated to be $299 billion in size today and is expected to double by 2030
Meanwhile, If Roblox achieves this target, it would more than 10x its revenue
Furthermore, Not only that, but Roblox is an early mover in the metaverse, which goes beyond just gaming
Furthermore, In contrast, And the global metaverse market itself is expected to grow to more than 10 times its current size by 2032
In contrast, The short answer is yes
Although Roblox is a massive platform that has grown impressively so far, there could still be plenty of room to run
The bottom line on Roblox Earlier this year, I wrote that I believed Roblox could double its then-current market cap to $82 billion within three years (something worth watching)
Thanks to strong momentum, it has already reached that, considering recent developments
Moreover, And if management can continue to execute on the growth strategy, there could still be a lot of upside potential ahead
On the other hand, I own Roblox in my portfolio and don't plan to sell a single.
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