Back in February, Morningstar equity analyst Matthew Dolgin said that the Roblox Corporation (RBLX) would need to increase its user base and its monetization efforts in order to justify its lofty valuation - which stands at about $70.3 billion as of this week.
With the smash hit video game Grow a Garden, Roblox appears to be doing just that.
On a recent Saturday, the game had 16.4 million active players, more than Fortnite ever experienced at its peak. Its player count was more than the top five games on Steam combined.
Grow a Garden’s explosion in popularity is especially surprising given that its gameplay is “the equivalent of watching paint dry,” according to those who don’t understand why it’s become a massive hit.
The game is a farming simulation in which players plant seeds and collect exotic pets, which they can buy and sell for the in-game currency called Sheckles.
Sheckles can be bought using Roblux’s in-game currency Robux - which itself is bought with real money.
Some players are even turning to third-party sites like eBay to spend as much as $100 on some of the game’s most sought-after crops and livestock.
Roblox is an online gaming platform that allows anyone to create a game which is then playable by everyone else on the platform.
It contains about 40 million user-generated games and “experiences” on its platform.
Janzen Madsen, who runs Splitting Point Studios, scouts and and acquires popular games on the platform - including Grow a Garden, which he acquired in April when it had just 2,000 concurrent users, according to The New York Times.
Madsen and his team then scaled the game, fixed some of its bugs, and added new features.
The game is especially popular with children - Madsen said that about 35% of its player base are under the age of 13.
Wall Street has taken notice of Grow a Garden’s enormous popularity.
Roblox’s share price has surged 78.6% YTD and 186.2% over the past year.
Roblox has even more room for growth
Oppenheimer recently reiterated its “outperform” rating for Roblox and its $125 price target.
The analyst suggests that many investors have not yet taken stock of the extent to which Grow a Garden has taken off with gamers.
“We believe most investors have under-appreciated the upside to 2Q25 booking from Grow a Garden, as they tend to under-estimate the durability of near-term momentum behind the game, driven by best-in-class liveops and social media virality,” Oppenheimer wrote.
The analyst added that based on a recent conversation with Splitting Point Studios, “with the most aggressive assumptions, we see RBLX quarterly bookings run-rate exiting June presenting 66% upside to high-end of management guidance, implying 106% Y/Y growth.”
To be sure, Roblox has been a popular platform with younger gamers even before Grow a Garden took off as a viral hit recently.
The company already had about 97.8 million active users during the early months of this year, according to the BBC.
According to Morningstar’s Dolgin, “about 40% of daily active users are under 13, and, historically, 80% have been under 25.”
Last year, Roblox generated $180.2 million in earnings before interest, taxes, depreciation and amortization on sales of $3.6 billion.
Your email address will not be published. Required fields are markedmarked