Roblox (NYSE:RBLX) Shares Gap Down - Should You Sell?

Key Points

• Roblox's share price gapped down significantly, opening at $113.83 after closing at $125.28.
• Analysts have provided mixed ratings, with 19 analysts giving a "buy" rating while two rated the stock as a sell, highlighting a consensus rating of "Moderate Buy".
• The company reported a loss of ($0.41) per share for the last quarter, missing the estimated loss, but revenue increased by 50.5% year-over-year to $1.44 billion.

Roblox Corporation (NYSE:RBLX - Get Free Report) gapped down prior to trading on Friday . The stock had previously closed at $125.28, but opened at $113.83. Roblox shares last traded at $116.31, with a volume of 5,680,662 shares.

Analysts Set New Price Targets

Several equities research analysts have weighed in on RBLX shares. Raymond James Financial cut shares of Roblox from a "strong-buy" rating to an "outperform" rating and increased their price target for the company from $81.00 to $130.00 in a research report on Wednesday, July 23rd. BTIG Research set a $131.00 target price on shares of Roblox and gave the stock a "buy" rating in a report on Monday, July 28th. Barclays raised their target price on Roblox from $62.00 to $120.00 and gave the stock an "equal weight" rating in a research note on Friday, August 1st. Morgan Stanley upped their price target on Roblox from $76.00 to $170.00 and gave the company an "overweight" rating in a research report on Friday, August 1st. Finally, Oppenheimer reiterated an "outperform" rating and issued a $125.00 price objective (up from $80.00) on shares of Roblox in a research report on Wednesday, June 18th. Nineteen investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $117.59.

Roblox Price Performance

The stock has a market cap of $76.63 billion, a P/E ratio of -83.07 and a beta of 1.63. The company has a debt-to-equity ratio of 2.94, a quick ratio of 0.97 and a current ratio of 0.97. The firm has a 50-day moving average price of $113.99 and a 200-day moving average price of $83.58.

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

Insider Transactions at Roblox

In related news, CEO David Baszucki sold 687,500 shares of the business's stock in a transaction dated Thursday, June 5th. The shares were sold at an average price of $92.26, for a total transaction of $63,428,750.00. Following the sale, the chief executive officer owned 211,559 shares of the company's stock, valued at $19,518,433.34. The trade was a 76.47% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Over the last three months, insiders have sold 4,980,441 shares of company stock worth $481,547,299. Company insiders own 12.92% of the company's stock.

Institutional Trading of Roblox

A number of hedge funds have recently made changes to their positions in the stock. Baird Financial Group Inc. boosted its stake in Roblox by 1.4% in the 2nd quarter. Baird Financial Group Inc. now owns 7,294 shares of the company's stock worth $767,000 after purchasing an additional 102 shares in the last quarter. Lido Advisors LLC raised its holdings in Roblox by 1.3% in the second quarter. Lido Advisors LLC now owns 8,529 shares of the company's stock worth $897,000 after buying an additional 106 shares during the last quarter. Ossiam raised its holdings in Roblox by 2.1% in the second quarter. Ossiam now owns 6,000 shares of the company's stock worth $631,000 after buying an additional 123 shares during the last quarter. Emerald Advisers LLC lifted its stake in shares of Roblox by 1.9% in the second quarter. Emerald Advisers LLC now owns 6,683 shares of the company's stock worth $703,000 after buying an additional 124 shares in the last quarter. Finally, Yousif Capital Management LLC grew its holdings in shares of Roblox by 1.9% during the second quarter. Yousif Capital Management LLC now owns 6,925 shares of the company's stock valued at $729,000 after buying an additional 127 shares during the last quarter. 94.46% of the stock is owned by 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.