If there’s a kid under 13 in your house, you’ve probably heard about Steal an Egg. It went from a brand-new Roblox release to one of the platform’s biggest games in a matter of weeks.

Hits like that are how Roblox makes money. Kids flock to a game, buy Robux to keep up, then move on to the next craze.

Roblox (RBLX) averaged 123 million daily active users in the second quarter, up 10%, and they logged 29 billion hours on the platform, according to the company’s earnings release. Bookings rose eight percent to $1.56 billion.

Management still believes in the long game. The company has “conviction in Roblox’s ability to deliver long-term growth in excess of 20%,” CEO David Baszucki said on its second-quarter call.

Investors haven’t been as patient. Roblox guided for third-quarter bookings to fall 14% to 18%, its first quarterly decline in four years, and shares fell nearly 30% on July 31, their worst one-day drop on record, Reuters reported.

According to a Bank of America research report shared with me, Roblox’s third quarter now looks better than feared, but the hit that saved it may already be fading.

Bank of America expects a Roblox third-quarter beat

Bank of America analyst Omar Dessouky raised his third-quarter bookings estimate to $1.70 billion from $1.64 billion in his Oct. 8 preview. That’s above the $1.62 billion Wall Street consensus he cited and the top of Roblox’s own guidance range of $1.58 billion to $1.65 billion.

The reason is engagement. Total platform hours fell seven percent from a year earlier in the third quarter, better than the 16% drop Dessouky had modeled, according to third-party data he tracks.

Strip out last year’s five breakout games, which have faded, and hours growth sped up to 37% from 20% in the second quarter, led by Steal an Egg.

Related: Roblox made one change and wiped out $9 billion

The catch is in the weekly numbers. “This year’s most successful launch, Steal an Egg reached peak daily hours comparable to last year’s [Grow a Garden] and Steal a Brainrot, but engagement appears to have rolled over (-9%/-18% W/W in the last two weeks),” wrote Dessouky.

Dessouky kept his Neutral rating and $48 price objective, about five percent above the $45.56 price in his report. The stock has climbed back sharply from the roughly $34.50 it hit on July 31, 247 Wall St. reported.

Search changes and age checks reshaped player engagement

Roblox brought some of this volatility on itself. Baszucki pointed on the call to “our strategic decision to focus our discovery algorithms directly on measured long-term retention,” a shift that Reuters said steered players toward games with less spending built in.

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CFO Naveen Chopra said the impact showed up “particularly with under 13 cohorts and was the primary factor impacting our bookings performance.”

Age checks added more friction. Daily active users slid from 152 million in late 2025 to 132 million in the first quarter after Roblox required facial age estimation to use chat, WebProNews reported, and fell again to 123 million in the second quarter.

At its developer conference in September, Roblox said discovery is becoming age-aware, since younger players favor short games they can drop in and out of, GamesBeat reported. Dessouky reads that as less punishing for short-lived, meme-like hits.

“A recalibrated algo serving hyper-personalized recommendations to younger users could refuel the hit factory, reviving U13 engagement and monetization,” wrote Dessouky.

Given that backdrop, it’s easy to see why investors want more proof. Fewer than half of the investors Bank of America recently spoke with expect Roblox to return to growth above 20%, Dessouky wrote.

Wall Street turned cautious fast after the July report. Benchmark and BTIG both cut the stock to Sell, while Deutsche Bank, Wedbush and BMO dropped their Buy-equivalent ratings, 247 Wall St. reported.

GTA 6 is the wildcard for holiday bookings

Dessouky expects Roblox’s fourth-quarter guidance to at least match the Street, but his own model is more cautious. He forecasts fourth-quarter bookings of $1.91 billion, below the $1.98 billion consensus and about 14% lower than a year earlier.

His worry is Grand Theft Auto 6, which Take-Two has confirmed for Nov. 19, according to heise. Dessouky assumes the launch pulls playing time away from the broader gaming world, Roblox included.

There’s evidence the hit pipeline is refilling. The number of games less than 30 days old in Roblox’s daily top 100 has held near its mid-2025 peak since June, according to Bank of America’s tracking.

Much will likely depend, however, on whether Roblox can turn one-off hits into a steady stream. In my view, that’s the core tension in the story: the algorithm is now built to reward games kids stick with, while the bookings still lean on games they binge and abandon.

Valuation is where the debate gets sharp. Dessouky values Roblox at 20 times his 2027 EBITDA estimate, roughly between high-growth software companies and traditional game publishers.

“RBLX looks inexpensive if it can sustain 20%+ growth in 2027 and beyond. Without proof of durable growth, valuation is at risk of compressing toward diversified video game publishers (10x),” wrote Dessouky.

Related: Deutsche Bank sees jarring signs in Roblox as stock crashes