Wolfe Research Upgrades Roblox (NYSE:RBLX) to “Strong-Buy”

Roblox (NYSE:RBLX) was upgraded by equities researchers at Wolfe Research from a “hold” rating to a “strong-buy” rating in a research note issued on Friday, Zacks reports.

A number of other equities analysts have also commented on the company. JPMorgan Chase & Co. increased their price target on Roblox from $40.00 to $53.00 and gave the company a “neutral” rating in a research note on Wednesday, October 14th. Piper Sandler reaffirmed a “neutral” rating and set a $47.00 price objective (down from $50.00) on shares of Roblox in a report on Friday, July 31st. TD Cowen decreased their price objective on Roblox from $49.00 to $40.00 and set a “hold” rating on the stock in a report on Friday, July 31st. Bank of America increased their target price on Roblox from $44.00 to $48.00 and gave the company a “neutral” rating in a research report on Monday, September 14th. Finally, Raymond James Financial reissued a “buy” rating on shares of Roblox in a report on Friday, September 11th. Two investment analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating, twelve have issued a Hold rating and five have given a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus target price of $53.46.

Roblox Stock Down 18.0%

Shares of RBLX stock opened at $43.01 on Friday. The stock has a market cap of $28.82 billion, a P/E ratio of -31.17 and a beta of 1.47. Roblox has a 52 week low of $33.88 and a 52 week high of $119.85. The company has a quick ratio of 0.82, a current ratio of 0.82 and a debt-to-equity ratio of 7.82. The company’s fifty day simple moving average is $46.34 and its two-hundred day simple moving average is $52.69.

Roblox (NYSE:RBLX) last issued its quarterly earnings data on Thursday, October 29th. The company reported ($0.32) earnings per share for the quarter, beating analysts’ consensus estimates of ($0.43) by $0.11. The firm had revenue of $1.57 billion during the quarter, compared to analyst estimates of $1.63 billion. Roblox had a negative return on equity of 303.93% and a negative net margin of 16.48%. The business’s quarterly revenue was up 15.6% compared to the same quarter last year. During the same quarter last year, the business posted ($0.37) earnings per share. Analysts predict that Roblox will post -1.41 EPS for the current fiscal year.

Insider Buying and Selling

In other news, insider Sean Buckley sold 4,321 shares of the stock in a transaction on Monday, August 24th. The shares were sold at an average price of $38.68, for a total value of $167,136.28. Following the sale, the insider owned 87,213 shares of the company’s stock, valued at approximately $3,373,398.84. This represents a 4.72% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Naveen K. Chopra sold 17,509 shares of the firm’s stock in a transaction dated Thursday, August 20th. The stock was sold at an average price of $37.96, for a total transaction of $664,641.64. Following the completion of the sale, the chief financial officer owned 363,249 shares of the company’s stock, valued at $13,788,932.04. This trade represents a 4.60% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 186,390 shares of company stock valued at $7,283,371 over the last 90 days. 10.05% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Roblox

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Assenagon Asset Management S.A. grew its stake in Roblox by 216.4% in the 3rd quarter. Assenagon Asset Management S.A. now owns 5,992,101 shares of the company’s stock worth $253,885,000 after acquiring an additional 4,098,311 shares in the last quarter. Amundi boosted its holdings in shares of Roblox by 83.7% in the first quarter. Amundi now owns 5,774,151 shares of the company’s stock valued at $326,586,000 after purchasing an additional 2,631,074 shares during the period. Spyglass Capital Management LLC purchased a new stake in shares of Roblox in the first quarter valued at approximately $44,116,000. Allspring Global Investments Holdings LLC boosted its holdings in shares of Roblox by 379.8% in the first quarter. Allspring Global Investments Holdings LLC now owns 921,424 shares of the company’s stock valued at $53,102,000 after purchasing an additional 729,379 shares during the period. Finally, Sei Investments Co. grew its stake in Roblox by 192.7% in the first quarter. Sei Investments Co. now owns 1,080,310 shares of the company’s stock worth $61,102,000 after purchasing an additional 711,259 shares in the last quarter. Institutional investors own 94.46% of the company’s stock.

Roblox News Summary

Here are the key news stories impacting Roblox this week:

• Positive Sentiment: Roblox reported a third-quarter loss of $0.32 per share, better than the $0.43 consensus estimate. Revenue increased 15.6% year over year to approximately $1.57 billion, while bookings also reportedly exceeded expectations. Roblox quarterly earnings report
• Positive Sentiment: Gross profit rose substantially year over year and the company generated $395 million in operating cash flow, although cash flow was below the prior-year period. These figures provide some support for the company’s longer-term financial position. Roblox third-quarter financial data
• Neutral Sentiment: Wedbush lowered its Roblox price target from $55 to $52 and changed its rating to “neutral.” The new target remains above the stock’s reference price, but the reduction signals less confidence in the pace of recovery. Wedbush Roblox price-target update
• Negative Sentiment: Average daily active users fell 9% year over year to 138 million, while engagement hours declined 15% to 34 billion. This was Roblox’s first reported year-over-year decline in daily users and raised concerns about slowing user engagement. Roblox user and engagement metrics
• Negative Sentiment: Soft fourth-quarter bookings guidance overshadowed the earnings beat, suggesting weaker holiday-period spending. Investors are also concerned that the expected release and popularity of GTA VI could compete for players’ time and gaming budgets. Roblox outlook and GTA VI article
• Negative Sentiment: Roblox remains unprofitable, reporting a net loss of approximately $227 million, while revenue came in below analyst expectations. The combination of declining engagement, continued losses and cautious guidance is driving the current selloff. Roblox earnings selloff analysis

Roblox Company Profile

Roblox Corporation operates Roblox, an online platform where users can create, publish, and participate in interactive digital experiences. The platform supports a broad range of user-generated content, including games, social spaces, entertainment, educational activities, and virtual events.

Roblox provides development tools through Roblox Studio, enabling creators and developers to design experiences and build virtual items and environments. Users can customize avatars, communicate with others, and access content across computers, mobile devices, consoles, and other supported platforms.