Investors will have to weigh the benefits of massive user growth against ongoing losses and a rising valuation.

And with Roblox stock trading at a premium valuation, it's hard to justify a buy for the stock even though it has some attributes of a potential long-term winner.

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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.

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's strong commercial momentum and significant growth in bookings make betting against the company risky. Find out why I rate RBLX stock a Buy.