Roblox (NYSE:RBLX) Shares Gap Up Following Analyst Upgrade

Key Points

• Roblox shares opened higher after Wedbush raised its price target from $40 to $48, though the firm maintained a neutral rating. The stock closed at $45.50 and opened at $47.50.
• Analyst sentiment remains mixed, with a consensus “Hold” rating and average price target of $60.14. Recent targets range from $38 at Deutsche Bank and Jefferies to $64 at Wells Fargo.
• Roblox reported a quarterly loss of $0.26 per share, better than estimates, but revenue of $1.47 billion fell short of expectations. The company also authorized a $3 billion share-repurchase program, covering up to 9.5% of outstanding shares.

Roblox Corporation (NYSE:RBLX - Get Free Report)'s share price gapped up prior to trading on Monday after Wedbush raised their price target on the stock from $40.00 to $48.00. The stock had previously closed at $45.50, but opened at $47.50. Wedbush currently has a neutral rating on the stock. Roblox shares last traded at $48.0180, with a volume of 2,563,675 shares.

A number of other brokerages also recently commented on RBLX. Deutsche Bank Aktiengesellschaft downgraded shares of Roblox from a "buy" rating to a "hold" rating and lowered their price target for the company from $56.00 to $38.00 in a report on Friday, July 31st. Bank of America boosted their price objective on Roblox from $44.00 to $48.00 and gave the stock a "neutral" rating in a research note on Monday. Jefferies Financial Group restated a "hold" rating and set a $38.00 price objective on shares of Roblox in a research report on Wednesday. Morgan Stanley lowered their price objective on Roblox from $62.00 to $55.00 and set an "overweight" rating for the company in a research note on Friday, July 31st. Finally, Wells Fargo & Company lifted their target price on Roblox from $46.00 to $64.00 and gave the stock an "overweight" rating in a report on Monday. One research analyst has rated the stock with a Strong Buy rating, thirteen have issued a Buy rating, fourteen have issued a Hold rating and three have given a Sell rating to the company. According to data from MarketBeat, the company presently has a consensus rating of "Hold" and an average target price of $60.14.

Insider Transactions at Roblox

In related news, insider Mark Reinstra sold 17,934 shares of Roblox stock in a transaction dated Thursday, August 20th. The shares were sold at an average price of $37.96, for a total transaction of $680,774.64. Following the completion of the sale, the insider owned 398,064 shares in the company, valued at $15,110,509.44. This trade represents a 4.31% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Naveen K. Chopra sold 17,509 shares of the business's stock in a transaction dated Thursday, August 20th. The shares were 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 directly owned 363,249 shares of the company's stock, valued at approximately $13,788,932.04. This trade represents a 4.60% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last quarter, insiders sold 185,236 shares of company stock valued at $7,538,642. Company insiders own 10.05% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of RBLX. NewEdge Advisors LLC increased its holdings in Roblox by 2.3% during the 1st quarter. NewEdge Advisors LLC now owns 10,236 shares of the company's stock worth $597,000 after purchasing an additional 231 shares during the period. Sivia Capital Partners LLC lifted its holdings in shares of Roblox by 70.2% in the 2nd quarter. Sivia Capital Partners LLC now owns 13,000 shares of the company's stock worth $1,368,000 after buying an additional 5,363 shares during the period. CW Advisors LLC bought a new position in shares of Roblox during the 2nd quarter worth $272,000. Baird Financial Group Inc. grew its position in shares of Roblox by 1.4% during the 2nd quarter. Baird Financial Group Inc. now owns 7,294 shares of the company's stock worth $767,000 after buying an additional 102 shares in the last quarter. Finally, WINTON GROUP Ltd purchased a new position in shares of Roblox during the second quarter valued at $438,000. Institutional investors own 94.46% of the company's stock.

Roblox Stock Performance

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 firm has a 50 day moving average price of $44.37 and a 200 day moving average price of $50.09. The stock has a market cap of $32.37 billion, a PE ratio of -33.72 and a beta of 1.47.

Roblox (NYSE:RBLX - Get Free Report) last released its quarterly earnings data on Thursday, July 30th. The company reported ($0.26) earnings per share for the quarter, topping analysts' consensus estimates of ($0.34) by $0.08. The company had revenue of $1.47 billion during the quarter, compared to analyst estimates of $1.60 billion. Roblox had a negative net margin of 17.60% and a negative return on equity of 292.85%. The firm's revenue for the quarter was up 8.3% compared to the same quarter last year. During the same period in the prior year, the firm earned ($0.41) earnings per share. As a group, research analysts forecast that Roblox Corporation will post -1.39 earnings per share for the current year.

Roblox announced that its Board of Directors has authorized a stock repurchase program on Tuesday, May 19th that allows the company to repurchase $3.00 billion in shares. This repurchase authorization allows the company to buy up to 9.5% of its shares through open market purchases. Shares repurchase programs are often a sign that the company's board believes its shares are undervalued.

Roblox Company Profile

Roblox Corporation develops and operates Roblox, an online platform where users can create, share and play interactive experiences. The platform supports a broad range of user-generated content, including games, social spaces, educational activities and entertainment experiences, and is accessible across computers, mobile devices, consoles and other supported platforms.

Roblox provides development tools through Roblox Studio, while its virtual economy uses Robux, a digital currency that users can purchase and spend on virtual items, avatar customization and other platform content.

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