Roblox (NYSE:RBLX) Stock Price Up 4.9% - Here's Why

Key Points

• Roblox shares rose 4.9% to about $40.42 in Monday trading, although volume was 88% below the stock’s average daily volume.
• Analysts remain mixed: the stock carries a consensus “Hold” rating and a $60.89 average price target, compared with its current price near $40.
• Roblox beat quarterly EPS expectations but missed revenue forecasts, while revenue increased 8.3% year over year. The company also authorized a $3 billion share repurchase plan, covering up to 9.5% of outstanding shares.

Roblox Corporation (NYSE:RBLX - Get Free Report) rose 4.9% during trading on Monday . The company traded as high as $39.98 and last traded at $40.4180. 1,420,612 shares changed hands during trading, a decline of 88% from the average daily volume of 11,811,312 shares. The stock had previously closed at $38.53.

Wall Street Analysts Forecast Growth

RBLX has been the topic of several research analyst reports. Roth Capital set a $65.00 target price on Roblox in a research note on Tuesday, May 5th. Wall Street Zen upgraded shares of Roblox from a "sell" rating to a "hold" rating in a report on Saturday, July 18th. Moffett Nathanson reaffirmed a "neutral" rating and set a $40.00 price objective on shares of Roblox in a research report on Monday, August 3rd. Wells Fargo & Company set a $46.00 price objective on shares of Roblox in a research note on Monday, August 3rd. Finally, Citigroup cut their target price on shares of Roblox from $70.00 to $60.00 and set a "buy" rating for the company in a research report on Monday, August 3rd. One equities research analyst has rated the stock with a Strong Buy rating, twelve have given a Buy rating, fifteen have assigned a Hold rating and three have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus price target of $60.89.

Roblox Price Performance

The company has a market capitalization of $27.26 billion, a PE ratio of -28.45 and a beta of 1.46. The company has a debt-to-equity ratio of 7.82, a quick ratio of 0.82 and a current ratio of 0.82. The stock has a 50 day moving average price of $46.04 and a two-hundred day moving average price of $51.60.

Roblox (NYSE:RBLX - Get Free Report) last announced its quarterly earnings results on Thursday, July 30th. The company reported ($0.26) EPS for the quarter, beating the consensus estimate of ($0.34) by $0.08. The business had revenue of $1.47 billion during the quarter, compared to analysts' expectations of $1.60 billion. Roblox had a negative return on equity of 292.85% and a negative net margin of 17.60%.The firm's quarterly revenue was up 8.3% compared to the same quarter last year. During the same quarter in the previous year, the business posted ($0.41) EPS. Equities analysts forecast that Roblox Corporation will post -1.39 earnings per share for the current year.

Roblox declared that its board has authorized a share repurchase plan on Tuesday, May 19th that allows the company to buyback $3.00 billion in outstanding shares. This buyback authorization allows the company to reacquire up to 9.5% of its stock through open market purchases. Stock buyback plans are often a sign that the company's management believes its shares are undervalued.

Insiders Place Their Bets

In other Roblox news, insider Sean Jack Buckley sold 4,321 shares of the firm's stock in a transaction dated Monday, August 24th. The stock was sold at an average price of $38.68, for a total transaction of $167,136.28. Following the transaction, the insider directly owned 87,213 shares in the company, valued at $3,373,398.84. This trade represents a 4.72% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO David Baszucki sold 52,568 shares of the business's stock in a transaction dated Thursday, August 20th. The stock was sold at an average price of $37.96, for a total value of $1,995,481.28. Following the completion of the sale, the chief executive officer directly owned 799,646 shares of the company's stock, valued at $30,354,562.16. This represents a 6.17% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 168,213 shares of company stock worth $6,831,901 in the last 90 days. 10.05% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Roblox

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. California State Teachers Retirement System lifted its position in Roblox by 5,370.1% during the 2nd quarter. California State Teachers Retirement System now owns 49,445,613 shares of the company's stock worth $2,688,852,000 after acquiring an additional 48,541,681 shares during the last quarter. Norges Bank bought a new stake in Roblox during the fourth quarter valued at about $435,424,000. SRS Investment Management LLC acquired a new stake in shares of Roblox in the fourth quarter valued at about $238,065,000. Amundi grew its position 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 last quarter. Finally, Capital International Investors increased its stake in shares of Roblox by 7.3% in the fourth quarter. Capital International Investors now owns 31,953,301 shares of the company's stock worth $2,589,282,000 after purchasing an additional 2,184,439 shares during the period. 94.46% of the stock is currently owned by institutional investors and hedge funds.

Roblox Company Profile

Roblox Corporation operates Roblox, a user-generated online platform that enables people to create, share and monetize immersive 3D experiences and games. The core offering centers on Roblox Studio, a development environment that allows independent creators and studios to design interactive worlds using the company's building tools and scripting language. Content on the platform spans games, virtual hangouts, branded experiences and live events, all delivered through a persistent social environment.

Roblox's business model is built around its virtual economy and creator ecosystem.

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