Roblox (NYSE:RBLX) Trading Down 9.3% on Disappointing Earnings

Key Points

• Roblox's shares fell 9.3% after the company reported quarterly earnings that missed analysts' expectations, with an earnings per share (EPS) of ($0.41) compared to the consensus estimate of ($0.37).
• The company's revenue for the quarter was $1.44 billion, significantly exceeding analysts' expectations of $1.20 billion and representing a 50.5% increase from the same period last year.
• Despite the weak earnings report, various research analysts have raised their price targets for Roblox, with some now rating it as "buy" and providing target prices ranging from $80.00 to $153.00.

Roblox Corporation (NYSE:RBLX - Get Free Report)'s stock price traded down 9.3% during trading on Friday after the company announced weaker than expected quarterly earnings. The company traded as low as $124.73 and last traded at $124.95. 10,444,488 shares were traded during mid-day trading, an increase of 19% from the average session volume of 8,768,609 shares. The stock had previously closed at $137.79.

The company reported ($0.41) earnings per share for the quarter, missing analysts' consensus estimates of ($0.37) by ($0.04). The business 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% on a year-over-year basis. During the same quarter last year, the company posted ($0.32) EPS.

Analyst Upgrades and Downgrades

RBLX has been the subject of a number of research analyst reports. Needham & Company LLC lifted their target price on Roblox from $79.00 to $159.00 and gave the stock a "buy" rating in a report on Friday. Morgan Stanley increased their price objective on Roblox from $76.00 to $170.00 and gave the company an "overweight" rating in a research report on Friday. Macquarie raised their target price on Roblox from $76.00 to $80.00 and gave the company an "outperform" rating in a research note on Monday, May 5th. Citigroup lifted their target price on Roblox from $123.00 to $152.00 and gave the stock a "buy" rating in a report on Wednesday, July 23rd. Finally, BMO Capital Markets lifted their target price on Roblox from $135.00 to $150.00 and gave the company an "outperform" rating in a research report on Friday. Two analysts have rated the stock with a sell rating, four have given a hold rating and nineteen have given a buy rating to the company's stock. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $117.59.

Insider Transactions at Roblox

In other Roblox news, CEO David Baszucki sold 687,500 shares of the company's stock in a transaction dated Monday, June 2nd. The shares were sold at an average price of $87.97, for a total transaction of $60,479,375.00. Following the transaction, the chief executive officer directly owned 211,559 shares in the company, valued at approximately $18,610,845.23. This represents a 76.47% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Insiders have sold 5,251,703 shares of company stock worth $492,380,210 over the last three months. Corporate insiders own 12.92% of the company's stock.

Institutional Trading of Roblox

Large investors have recently modified their holdings of the business. Whipplewood Advisors LLC purchased a new position in shares of Roblox in the 2nd quarter valued at $34,000. ORG Partners LLC bought a new stake in shares of Roblox during the 2nd quarter worth about $33,000. Generali Asset Management SPA SGR acquired a new position in shares of Roblox in the 2nd quarter worth approximately $40,000. Kiker Wealth Management LLC increased its position in shares of Roblox by 2,646.7% in the second quarter. Kiker Wealth Management LLC now owns 412 shares of the company's stock worth $43,000 after acquiring an additional 397 shares in the last quarter. Finally, Fifth Third Bancorp lifted its stake in Roblox by 124.7% in the second quarter. Fifth Third Bancorp now owns 537 shares of the company's stock valued at $56,000 after acquiring an additional 298 shares during the last quarter. 94.46% of the stock is currently owned by institutional investors and hedge funds.

Roblox Price Performance

The firm has a market capitalization of $82.06 billion, a price-to-earnings ratio of -89.07 and a beta of 1.63. The stock's 50 day moving average price is $106.02 and its two-hundred day moving average price is $79.21. The company has a debt-to-equity ratio of 2.94, a current ratio of 0.97 and a quick ratio of 0.97.

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.