Roblox (NYSE:RBLX) Stock Price Down 5.2% - Here's Why

Key Points

• Roblox shares fell 5.2% on Tuesday, trading as low as $44.90 amid lighter-than-usual volume. The stock closed previously at $48.16.
• Several analysts recently cut ratings or lowered price targets on Roblox, including TD Cowen and Piper Sandler, even as the consensus rating remains “Hold” with an average target price of $87.07.
• Roblox announced a $3 billion share buyback, which may signal management thinks the stock is undervalued. The company also reported mixed quarterly results, beating EPS estimates but missing revenue expectations.

Roblox Corporation (NYSE:RBLX - Get Free Report) dropped 5.2% on Tuesday . The company traded as low as $44.90 and last traded at $45.66. Approximately 1,938,404 shares were traded during mid-day trading, a decline of 84% from the average daily volume of 11,843,800 shares. The stock had previously closed at $48.16.

Analyst Ratings Changes

A number of research firms have recently commented on RBLX. TD Cowen raised shares of Roblox from a "sell" rating to a "hold" rating and reduced their target price for the stock from $54.00 to $49.00 in a research report on Friday, May 1st. The Goldman Sachs Group dropped their price target on shares of Roblox from $125.00 to $65.00 and set a "buy" rating on the stock in a research note on Friday, May 1st. Piper Sandler cut shares of Roblox from an "overweight" rating to a "neutral" rating and decreased their price objective for the company from $100.00 to $50.00 in a research report on Monday, May 4th. Roth Mkm set a $65.00 target price on Roblox in a research note on Tuesday, May 5th. Finally, Needham & Company LLC assumed coverage on Roblox in a research report on Friday, May 1st. They set a "buy" rating and a $60.00 target price on the stock. One investment analyst has rated the stock with a Strong Buy rating, twelve have issued a Buy rating, fourteen have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of "Hold" and an average target price of $87.07.

Roblox Trading Down 4.6%

The company has a debt-to-equity ratio of 2.45, a quick ratio of 0.89 and a current ratio of 0.89. The business's 50 day moving average price is $53.40 and its 200-day moving average price is $70.88. The firm has a market cap of $30.85 billion, a price-to-earnings ratio of -29.07 and a beta of 1.50.

Roblox (NYSE:RBLX - Get Free Report) last announced its quarterly earnings data on Thursday, April 30th. The company reported ($0.35) earnings per share for the quarter, beating the consensus estimate of ($0.41) by $0.06. Roblox had a negative return on equity of 277.69% and a negative net margin of 20.69%.The firm had revenue of $1.44 billion during the quarter, compared to analyst estimates of $1.74 billion. During the same period in the previous year, the company earned ($0.32) earnings per share. Roblox's quarterly revenue was up 43.4% on a year-over-year basis. Equities analysts expect that Roblox Corporation will post -1.4 EPS for the current year.

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

Insider Activity

In other Roblox news, insider Mark Reinstra sold 5,460 shares of the company's stock in a transaction dated Thursday, May 21st. The shares were sold at an average price of $46.40, for a total value of $253,344.00. Following the completion of the transaction, the insider owned 432,738 shares in the company, valued at approximately $20,079,043.20. This represents a 1.25% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Naveen K. Chopra sold 16,863 shares of Roblox stock in a transaction that occurred on Wednesday, May 20th. The shares were sold at an average price of $45.28, for a total value of $763,556.64. Following the sale, the chief financial officer directly owned 380,758 shares in the company, valued at approximately $17,240,722.24. This trade represents a 4.24% decrease in their position. 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. Insiders have sold 178,453 shares of company stock valued at $8,696,984 over the last quarter. Corporate insiders own 10.05% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in RBLX. Vanguard Group Inc. raised its stake in shares of Roblox by 1.6% during the fourth quarter. Vanguard Group Inc. now owns 63,458,784 shares of the company's stock valued at $5,142,065,000 after purchasing an additional 1,020,786 shares in the last quarter. Capital International Investors boosted its position in shares of Roblox by 7.3% during the 4th quarter. Capital International Investors now owns 31,953,301 shares of the company's stock valued at $2,589,282,000 after purchasing an additional 2,184,439 shares in the last quarter. Morgan Stanley grew its stake in shares of Roblox by 8.1% in the 4th quarter. Morgan Stanley now owns 20,728,914 shares of the company's stock worth $1,679,664,000 after purchasing an additional 1,555,549 shares during the last quarter. State Street Corp raised its holdings in shares of Roblox by 3.3% in the 4th quarter. State Street Corp now owns 13,812,362 shares of the company's stock worth $1,119,216,000 after purchasing an additional 442,518 shares in the last quarter. Finally, Geode Capital Management LLC raised its holdings in shares of Roblox by 4.7% in the 4th quarter. Geode Capital Management LLC now owns 12,220,045 shares of the company's stock worth $988,002,000 after purchasing an additional 547,103 shares in the last quarter. Institutional investors and hedge funds own 94.46% of the company's stock.

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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