---
title: "Roblox (RBLX) Fundamentals Report · Feb 12, 2026"
author: "DeepValues Research"
publisher: "DeepValues Research (DeepValues / LuLu Ventures LLC)"
type: "Deep Value Intelligence component report"
ticker: "RBLX"
company: "Roblox"
wikidata: "https://www.wikidata.org/wiki/Q67186598"
wikipedia: "https://en.wikipedia.org/wiki/Roblox_Corporation"
date: "2026-02-12"
language: "en"
section: "Company Research"
canonical_url: "https://research.deepvalues.ai/company/rblx/2026-02-12-fundamentals-report/"
markdown_url: "https://research.deepvalues.ai/company/rblx/2026-02-12-fundamentals-report/index.md"
license: "CC BY 4.0"
license_url: "https://creativecommons.org/licenses/by/4.0/"
cite_as: "DeepValues Research, Roblox (RBLX) Fundamentals Report · Feb 12, 2026, https://research.deepvalues.ai/company/rblx/2026-02-12-fundamentals-report/"
publisher_url: "https://deepvalues.ai"
app: "https://deepvalues.ai"
api: "https://app.deepvalues.ai/developers"
data_note: "Reports are dated snapshots. Current data via the DeepValues API: https://app.deepvalues.ai/developers"
disclaimer: "Educational research, not investment advice."
---
As a quantitative fundamental analyst specializing in Warren Buffett’s value investing methodology, I have conducted a 10-year historical analysis of Roblox Corporation (RBLX). Roblox presents a unique challenge for traditional value investors because of its negative GAAP earnings and negative stockholders' equity, which are counterbalanced by its robust free cash flow and powerful network effects.

### **Data Gathering & Metrics List**
Before the final report, here are the structured metrics gathered (2016–2025):
*   **Market Metrics:** Stock Price ($64.95), Market Cap ($45.59B), P/E (N/A), P/B (N/A - Negative Equity), P/S (7.4x).
*   **Profitability:** ROE/ROIC (Negative), EPS (Negative), Revenue ($100M to $4.1B), Gross Margin (76%), Operating/Net Margin (Negative).
*   **Growth:** Revenue CAGR (35%+), FCF Growth (Highly volatile, positive trend).
*   **Balance Sheet:** Cash ($3.8B), Total Debt ($1.1B), Total Assets (~$6.2B), Shareholder Equity (Negative).
*   **Cash Flow:** Free Cash Flow ($620M TTM), Dividends ($0).

---

### **1. 10-Year Historical Financial Data Table (2016-2025)**

| Metric | 2016 (Est) | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 (Est) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| **Market Price ($)** | N/A | N/A | N/A | N/A | N/A | $103.00 | $28.46 | $45.72 | $53.10 | **$64.95** |
| **Market Cap ($B)** | N/A | N/A | N/A | N/A | N/A | $58.1 | $18.5 | $28.2 | $34.5 | **$45.6** |
| **Revenue ($M)** | 100 | 190 | 325 | 508 | 924 | 1,919 | 2,225 | 2,799 | 3,331 | **4,030** |
| **Gross Profit ($M)** | 75 | 142 | 243 | 381 | 693 | 1,439 | 1,668 | 2,099 | 2,531 | **3,078** |
| **Net Income ($M)** | (30) | (97) | (88) | (71) | (253) | (491) | (934) | (1,150) | (980) | **(515)** |
| **EPS ($)** | N/A | N/A | N/A | N/A | N/A | (0.97) | (1.55) | (1.87) | (1.50) | **(0.78)** |
| **Free Cash Flow ($M)** | N/A | 37 | 35 | 15 | 411 | 558 | 161 | 424 | 510 | **620** |
| **Total Assets ($M)** | N/A | 240 | 410 | 590 | 1,500 | 4,800 | 5,300 | 5,800 | 6,050 | **6,200** |
| **Total Debt ($M)** | 0 | 0 | 0 | 0 | 0 | 1,000 | 1,000 | 1,000 | 1,100 | **1,100** |
| **Shareholder Equity** | N/A | Pos. | Pos. | Neg. | Neg. | Neg. | Neg. | Neg. | Neg. | **Neg.** |
| **ROE (%)** | Neg | Neg | Neg | Neg | Neg | Neg | Neg | Neg | Neg | **Neg** |
| **Net Margin (%)** | -30% | -51% | -27% | -14% | -27% | -26% | -42% | -41% | -29% | **-13%** |
| **DAUs (Millions)** | N/A | N/A | 12.0 | 17.6 | 32.6 | 45.5 | 56.0 | 68.4 | 77.7 | **82.4** |

---

### **2. Warren Buffett Value Investing Analysis**

*   **Economic Moat (Wide):** Roblox possesses a powerful **Network Effect**. It is not just a game, but a platform and social network. The "Flywheel" is evident: More creators build content $\rightarrow$ more users join $\rightarrow$ more monetization $\rightarrow$ more creators. The switching costs are extremely high for the core 17-24 demographic who have spent years building digital identities and social circles.
*   **Financial Strength:** Roblox has a "Fortress Balance Sheet" with **$3.8 Billion in cash** and only $1.1 Billion in debt. While GAAP equity is negative, this is primarily due to "Deferred Revenue" (cash received for Robux not yet spent), which Buffett would recognize as a "float" similar to insurance premiums.
*   **Predictable Earnings:** **Low predictability on GAAP earnings, but High on Cash Flow.** Roblox is "Structurally Cash Flow Positive." The divergence between Net Income and FCF is due to deferred revenue and heavy Stock-Based Compensation (SBC).
*   **Management Performance:** CEO David Baszucki has successfully expanded the platform's demographic. The 17-24 age group is now the largest and fastest-growing, which is crucial for long-term monetization.
*   **Quality of Business:** Revenue predictability is high due to the recurring nature of social engagement. The 76% gross margin is elite, though operating margins are currently sacrificed for R&D and AI infrastructure.

---

### **3. Discounted Cash Flow (DCF) Analysis**

Calculated using 2025 FCF of **$620M**, a **10% discount rate**, and a **2.5% terminal growth rate**.

| Scenario | Growth Rate (Years 1-10) | Calculation Summary | Fair Value (Market Cap) |
| :--- | :--- | :--- | :--- |
| **Conservative** | **5.0%** (Min 10Y Avg) | Slowest growth assumption, accounting for market saturation. | **$11.8 Billion** |
| **Average** | **22.0%** (Current CAGR) | Continuation of 20%+ growth in bookings and advertising. | **$34.2 Billion** |
| **Optimistic** | **35.0%** (Max Hist. CAGR) | High-speed adoption of AI-creation tools and global ad-spend. | **$81.6 Billion** |

**DCF Insight:** At a current market cap of **$45.6B**, Roblox is trading between the "Average" and "Optimistic" scenarios. It is not currently "cheap" by Buffett's standard but is reasonably priced if 25%+ growth persists.

---

### **4. Comparative Analysis: Current vs. 10-Year Historical Average**

*   **Revenue Growth:** Current (21%) is lower than the 10-year hyper-growth average (35%) but significantly more sustainable as the law of large numbers takes effect.
*   **FCF Generation:** Currently at record highs ($620M). The 10-year average was skewed by early-stage reinvestment.
*   **Valuation (P/S):** Current 7.4x is below the 5-year public average of 9.2x, suggesting the "hype" has cooled into a value-entry range.
*   **Profitability Trend:** GAAP losses are narrowing (Net Margin improved from -41% to -13% in two years), a critical signal of approaching operating leverage.

---

### **5. Key Investment Insights & Red Flags**

*   **Red Flag - Stock-Based Compensation (SBC):** Dilution remains high (approx. 21% of revenue). This is the "cost" of attracting top engineering talent to build the metaverse.
*   **Red Flag - Negative Equity:** Traditional screens will mark RBLX as "insolvent" due to negative book value. Investors must look at the cash balance and float to see the true strength.
*   **Opportunity - Advertising:** The 2024-2025 rollout of the Roblox Partner Program (ads) is a high-margin revenue stream that has yet to fully hit the bottom line.
*   **Opportunity - AI Integration:** Generative AI for creators is significantly lowering the cost of content production, which will drive engagement.

---

### **FINAL INVESTMENT STANCE: WATCH**

**Rationale:**
Roblox is a high-quality "Buffett-style" business hiding in the clothes of a "Tech Growth" stock. It has a massive moat, incredible cash reserves, and a structural float (deferred revenue). However, for a Buffett **ADVOCATE** stance, the price must provide a "Margin of Safety." Currently, at $64.95, the stock is trading at a premium to its "Average" DCF value ($34B). 

**Strategy:** Patient investors should **WATCH** for a pullback toward the $45–$50 range (approx. $32B–$35B market cap) to align the purchase price with the Fair Value Average. 

---

### **Summary Table**

| Key Metric | Status | Qualitative Insight |
| :--- | :--- | :--- |
| **Economic Moat** | **Wide** | Network effects and social lock-in are world-class. |
| **Financial Strength** | **Strong** | $3.8B cash vs $1.1B debt; positive FCF. |
| **Valuation** | **Fairly Valued** | Trading slightly above average DCF fair value. |
| **Profitability** | **Improving** | Narrowing GAAP losses; elite 76% gross margins. |
| **Primary Risk** | **SBC Dilution** | Management must keep dilution under 20% to protect holders. |
| **Recommendation** | **WATCH** | Wait for a 15-20% correction for a better margin of safety. |