Additionally, Roblox's stock is priced at a premium valuation, giving investors no margin of safety. In short, I don't think Roblox stock is a buy now.

And unlike Roblox, the latter is a hugely profitable company. If Roblox fails to meet its high expectations, the stock valuation could plummet, reflecting the new reality.

Data by YCharts However, Roblox's faster rate of top-line growth and untapped opportunities to monetize its user base justify the premium.

Roblox's early 2022 revenue was up 83%, and its current first-quarter figure of $655 million is up 69% compared to two years earlier. Losses continued ...