Roblox is back in court, defending itself against more charges of child endangerment.

Roblox Corporation (NYSE: RBLX), the online gaming platform that's especially popular with teens and younger kids, saw its stock sell off hard this morning -- down more than 10%.

Roblox Corporation (RBLX 3.94%), the online gaming platform that's especially popular with teens and younger kids, saw its stock sell off hard this morning -- down more than 10%.

As investors evaluate Roblox, it's critical to understand the risks beneath the surface. Here are two key red flags that deserve your attention before you buy the stock. Image source: Getty Images.

Roblox is a stock for optimists with a long time horizon -- not for the faint of heart.

Roblox (RBLX) stock drops 9% amid lawsuits & backlash over child safety concerns. Learn how the crisis impacts its reputation and business model.

A viral notice claiming Roblox will shut down on September 1, 2025, due to safety concerns and user demand has sparked panic.

2. Roblox's valuation is pricing in a perfect outcome Despite its lack of profits, Roblox is trading at a premium, recently at roughly 21 times the price-to-sales (P/S) ratio.

Roblox responded by banning his accounts and issuing a cease-and-desist notice, while safety officials emphasized that vigilante actions, though well-intentioned, create risks for users.