Roblox Corp (RBLX) stock intrinsic value fair value estimate & owner earnings analysis

Roblox runs an online platform where an average of 127 million people a day in 2025 played and socialised in "experiences" built by independent creators. Users buy the virtual currency Robux up front, mostly through the Apple and Google app stores; creators earn Robux when players spend in their experiences and can cash them out for dollars through the Developer Exchange. Revenue in 2025 was $4.89 billion: 61% from users billed in the United States and Canada, 19% from Europe and 11% from Asia-Pacific. The key accounting judgement. Roblox collects the cash when Robux are bought, but it spreads the revenue from durable virtual items over an estimated paying-user life of 27 months. Creator payouts and hosting are expensed as they happen. So in a fast-growing year reported revenue lags the business actually being done: in 2025 deferred revenue rose $1.94 billion. We measure owner earnings on a cash-bookings basis. That means counting the upfront cash, less the app-store fees paid on it, while still stripping out ordinary working-capital swings. We do this because the deferral is a permanent lag, not a timing swing that reverses: if growth stopped, revenue would simply catch up to bookings. On a strict revenue basis Roblox lost about $1.2 billion of owner earnings in 2025. On the bookings basis it earned $406 million. We treat stock compensation as a real cost. It was $1.13 billion in 2025. The record. On this basis owner earnings per share were $0.45 in 2021, -$1.03 in 2022, -$1.01 in 2023, -$0.33 in 2024 and $0.59 in 2025. The five-year middle value is -$0.33, but those losses came from a smaller company building data centres and ramping up stock pay faster than revenue. The first half of 2026 confirmed the 2025 level. Bookings (revenue plus the change in deferred revenue) rose about 25%. Stock compensation was nearly flat, at $557 million against $544 million. So we start from 2025's $0.59 rather than the five-year middle value. Before stock pay, owner earnings were 7% of bookings in 2023, 18% in 2024 and 22.5% in 2025. That margin slipped about three points in early 2026 because Roblox chose to pay creators more. It launched a Creator Rewards Program in July 2025 and raised the Developer Exchange cash-out rate by 8.5% from September 5, 2025. Developer exchange fees rose 63% in 2025, while revenue rose 36%. Base case ($37.05 a share). Bookings grow about 22% in 2026, below the first-half pace because the second half faces an unusually strong late-2025 comparison. Growth then slows steadily to 5% by 2035, about 11% a year across the decade, well below the 29% annual rate of 2020 to 2025. The margin before stock pay recovers from about 19.5% to 25% by 2031, close to what the second half of 2025 already achieved, as research and administrative costs grow more slowly than bookings. Stock pay grows 6% a year, and capital spending for growth (about 6.6% of added bookings) is charged. That gives 2026 owner earnings of about $0.52 a share, below 2025's $0.59 because of the higher creator payouts and the growth spending. Earnings hold level from 2036 to 2045, supported by the creator-and-user network, and then fade to zero over the next ten years. We end the story there because engagement is hit-driven: half of in-experience hours in December 2025 went to the top 50 experiences, and we cannot evidence durability beyond that. Bear case ($1.14). The 2025 surge partly reflected hit experiences and fades. Bookings grow 10% in 2026 and fall 5% in 2027 as the mandatory age checks for chat, in force since January 2026, weigh on engagement, then grow 3 to 5% a year. The margin before stock pay stays at 17%, near the early-2026 run-rate, as creator payouts rise again and legal costs mount from child-safety lawsuits and state attorneys general claims. Stock pay still rises 3% a year. Owner earnings sit near $0.10 a share and run out by 2045. Debt is not what drives this case down. At the end of 2025 Roblox held $5.5 billion of cash and investments against $1.0 billion of 3.875% notes due May 2030. The cause is that stock pay absorbs nearly all the cash the business makes. The cash counts through the interest it earns ($202 million in 2025) and is not added again separately. Bull case ($78.87). Bookings grow 28% in 2026 and slow to 6% by 2035. The operating leverage of 2023 to 2025 continues, taking the margin before stock pay to 28% by 2031. Stock pay grows only 4% a year, and earnings persist through 2055 before fading. All cases discount future owner earnings at 6%. The value rests on one year of positive owner earnings and on stock pay continuing to shrink relative to bookings. If stock pay starts growing with bookings again, if creator payouts are raised further, or if litigation forces costly product changes, value moves toward the bear case. We derived bookings ourselves from reported revenue and deferred revenue. For the first half of 2026 we inferred the change in the developer exchange liability from the cash-flow totals, so those half-year figures are close estimates rather than line items from the filings. The margin-of-safety price is about $18, roughly half the base value. That wide margin reflects a bear case near zero and a short record of profitability after stock pay, and it applies only once the full-year 2026 results confirm positive owner earnings.