Roblox (NYSE:RBLX) Shares Down 3.5% - Here's Why

Key Points

• Roblox's shares fell by 3.5% to $131.09, with trading volume significantly down by 79% compared to its daily average.
• Multiple analysts have issued positive ratings, with several raising their price targets, indicating a consensus rating of "Moderate Buy" and an average price target of $123.16.
• Roblox reported a revenue increase of 50.5% year-over-year for the last quarter, but missed earnings estimates and displayed negative margins and returns.

Roblox Corporation (NYSE:RBLX - Get Free Report) dropped 3.5% during trading on Wednesday . The stock traded as low as $131.20 and last traded at $131.09. Approximately 1,796,068 shares changed hands during mid-day trading, a decline of 79% from the average daily volume of 8,705,034 shares. The stock had previously closed at $135.84.

Wall Street Analyst Weigh In

A number of equities research analysts have recently issued reports on the stock. Wedbush reissued an "outperform" rating and issued a $165.00 price target on shares of Roblox in a report on Thursday, September 4th. Piper Sandler raised their price target on Roblox from $105.00 to $138.00 and gave the company an "overweight" rating in a report on Thursday, July 24th. Arete Research set a $116.00 price objective on shares of Roblox in a research report on Tuesday, September 9th. Cowen reissued a "sell" rating on shares of Roblox in a report on Monday, August 18th. Finally, Citigroup lifted their price objective on shares of Roblox from $123.00 to $152.00 and gave the stock a "buy" rating in a report on Wednesday, July 23rd. Twenty equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and two have issued a Sell rating to the company's stock. According to data from MarketBeat.com, Roblox has a consensus rating of "Moderate Buy" and a consensus price target of $123.16.

Roblox Stock Performance

The stock's fifty day moving average price is $125.89 and its 200 day moving average price is $93.74. The company has a current ratio of 0.97, a quick ratio of 0.97 and a debt-to-equity ratio of 2.94.

Roblox (NYSE:RBLX - Get Free Report) last posted its earnings results on Thursday, July 31st. The company reported ($0.41) earnings per share for the quarter, missing analysts' consensus estimates of ($0.37) by ($0.04). The firm had revenue of $1.44 billion during the quarter, compared to the consensus estimate of $1.20 billion. Roblox had a negative net margin of 23.67% and a negative return on equity of 372.96%. The firm's revenue was up 50.5% compared to the same quarter last year. During the same period in the prior year, the company posted ($0.32) EPS. Roblox has set its FY 2025 guidance at EPS. Q3 2025 guidance at EPS. As a group, equities analysts predict that Roblox Corporation will post -1.49 earnings per share for the current fiscal year.

Insider Activity

In related news, Director Anthony P. Lee sold 111,112 shares of the company's stock in a transaction on Friday, August 1st. The shares were sold at an average price of $131.01, for a total transaction of $14,556,783.12. The transaction was disclosed in a filing with the SEC, which is accessible through this hyperlink. Also, CEO David Baszucki sold 192,617 shares of Roblox stock in a transaction on Tuesday, June 24th. The stock was sold at an average price of $105.13, for a total transaction of $20,249,825.21. Following the completion of the transaction, the chief executive officer directly owned 211,559 shares of the company's stock, valued at $22,241,197.67. The trade was a 47.66% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have sold a total of 822,938 shares of company stock valued at $92,998,426 in the last ninety days. Corporate insiders own 12.92% of the company's stock.

Institutional Investors Weigh In On Roblox

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC increased its position in shares of Roblox by 7.2% during the 4th quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 2,084,605 shares of the company's stock valued at $120,615,000 after purchasing an additional 140,050 shares during the last quarter. Focus Partners Advisor Solutions LLC acquired a new stake in shares of Roblox in the 4th quarter worth $278,000. GF Fund Management CO. LTD. purchased a new stake in Roblox during the 4th quarter worth approximately $4,322,000. Cache Advisors LLC purchased a new position in Roblox in the 4th quarter worth $1,215,000. Finally, Toronto Dominion Bank increased its holdings in Roblox by 7.3% in the 4th quarter. Toronto Dominion Bank now owns 64,476 shares of the company's stock worth $3,731,000 after buying an additional 4,384 shares during the period. 94.46% of the stock is currently owned by hedge funds and other institutional investors.

Roblox Company Profile

Roblox Corporation develops and operates an online entertainment platform in the United States and internationally. It offers Roblox Studio, a free toolset that allows developers and creators to build, publish, and operate 3D experiences, and other content; Roblox Client, an application that allows users to explore 3D experience; and Roblox Cloud, which provides services and infrastructure that power the platform.