Quick Read
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RBLX surged 21% in October but now trades above its average analyst price target, and Q3 bookings guidance calls for a year-over-year drop of 14 to 18%.
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While RBLX climbed 21% in October, gaming peers TTWO and U fell 7% and 4%, respectively, over the same stretch.
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Bleecker Street Research disclosed a short position, claiming Roblox's age-verification is easily bypassed and monthly paying users dropped from 36.7 million to 27 million.
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October has been a rebound month for Roblox( NYSE:RBLX ), and the timing raises a fair question with its quarterly report due after the close. Roblox stock is up 21% since the September 30 close to $51.38 during Tuesday's session, even as it slips ahead of the upcoming third-quarter earnings report. That gain still leaves the stock down 37% year to date.
Roblox has moved sharply against its sector. The Communication Services Select Sector SPDR Fund( NYSEARCA:XLC ) is down 7% in October. Meanwhile, the SPDR S&P 500 ETF Trust( NYSEARCA:SPY ) is up 1% over the same stretch.
How Roblox Climbed Back From Its July Low
Shares of Roblox fell after the company's July 30 Q2 2026 report, when weaker monetization and a soft bookings outlook eclipsed growth. The stock hit a 52-week low of $33.88 on July 31 before starting to recover. That recovery wasn't smooth, as Roblox dropped 10% on September 28 after Jefferies downgraded the stock.
24/7 Wall St. asked on October 19 whether Roblox was dead money after its 2026 slide. October's climb has since moved the debate toward what the Q3 report can deliver.
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Roblox Earnings Setup Points to Falling Bookings
The company will release its Q3 2026 results after the market closes on October 29. Roblox's own guidance calls for Q3 revenue of $1.41 billion to $1.49 billion, or growth of 4% to 10% year over year (YoY). Under that same outlook, Roblox expects bookings to fall 14% to 18% YoY. Analysts expect a loss of $0.41 per share.
Chief Financial Officer Naveen K. Chopra warned on the July 30 call that "Monetization weakness is likely to continue." That caution from Roblox's finance chief sets a low bar, which could cut either way for the stock.
Bull Case for Roblox Rests on Cash and Older Users
Roblox's Q2 revenue rose 36% to $1.5 billion. Daily active users reached 123 million, up 10%, according to Roblox, a level Bleecker Street Research flags as a decline. Free cash flow rose 66% to $294 million, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $152 million, Roblox disclosed.
Growth among U.S. users aged 18 and older hit 32% at Roblox in Q2, a group that tends to spend more. AI-powered creation tools such as Build and discovery features such as Moments could lift engagement and spending over time.
Nick McKay of Freedom Capital Markets rates Roblox a Buy with a $55 target, and Alicia Reese of Wedbush raised her target to $55 from $48 while keeping a Neutral rating. According to Barchart, Roblox carries a consensus Moderate Buy rating and a Street-high target of $95.
Bear Case Centers on Bleecker Street's Short Report
Bleecker Street Research disclosed a short position in Roblox on October 27, and the shares fell. In its report, Bleecker Street Research said it bought 100 age-verified child accounts on third-party marketplaces for $190.91, claiming that Roblox's age-verification system is easily circumvented. The short seller also documented ways to bypass parental controls.
On growth, Bleecker Street Research argued Roblox's daily active users fell from 151.5 million to the Q2 level noted above, while monthly paying users dropped from 36.7 million to 27 million. Roblox's creator payout growth slowed from 85% to 15%, Bleecker Street Research said. Using third-party data, Bleecker Street Research estimated Roblox's new active users fell by about half YoY in Q3.
Child safety remains a broader concern for Roblox. Los Angeles County has sued the company, alleging the platform fails to protect children. The stock also now trades above the $51.12 average analyst price target.
Roblox Breaks Away From Take-Two and Unity
Roblox's closest gaming peers have moved the other way. Take-Two Interactive( NASDAQ:TTWO ) stock is down 7% in October to $192.41, with its Grand Theft Auto VI launch set for November 19. Shares of Unity Software( NYSE:U ) are down 4% over the same stretch to $39.21.
Each business makes its money differently. At Roblox, creators build experiences and players spend Robux, with the company taking a share. Rockstar Games, 2K and Zynga give Take-Two a slate of discrete titles plus recurring in-game spending. Unity's model leans on game-engine subscriptions and an AI-driven mobile ad network, so it's tied to gaming only indirectly.
Bulls and Bears Need Different Proof From Roblox's Q3 Numbers
The bulls need Roblox to deliver bookings at or above the top of its guided range, plus signs that older users and new discovery tools are lifting spending per hour.
For the bears, the report would need to echo Bleecker Street's user-decline claims or pair them with a weak Q4 outlook. Shareholders face a stock that moved sharply after its July 30 report. Investors may want to be cautious while the debate over Roblox's monetization continues.
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