The Goldman Sachs Group Issues Pessimistic Forecast for Roblox (NYSE:RBLX) Stock Price

Key Points

• The Goldman Sachs Group cut its price target on Roblox from $140 to $125 but kept a Buy rating, implying roughly a 103.8% upside from the stock's recent close.
• Analyst coverage is mixed but skews positive — the consensus is a Moderate Buy with an average target of $116.16, even as several firms (Needham, Morgan Stanley, JPMorgan) have recently lowered their price targets.
• Roblox reported Q results showing EPS of -$0.45 (beats estimates) and revenue of $1.42B (below estimates), with weak profitability metrics and insiders selling about 551,996 shares (~$38.4M) over the last quarter.

Roblox (NYSE:RBLX - Get Free Report) had its price objective dropped by The Goldman Sachs Group from $140.00 to $125.00 in a note issued to investors on Wednesday. The brokerage currently has a "buy" rating on the stock. The Goldman Sachs Group's price objective points to a potential upside of 103.83% from the company's previous close.

Other equities analysts have also issued reports about the company. Needham & Company LLC dropped their price objective on Roblox from $159.00 to $105.00 and set a "buy" rating on the stock in a research note on Friday, February 6th. BTIG Research reiterated a "buy" rating and issued a $122.00 price objective on shares of Roblox in a research note on Monday, April 13th. Wall Street Zen upgraded Roblox from a "sell" rating to a "hold" rating in a research note on Saturday, March 28th. Morgan Stanley dropped their price objective on Roblox from $155.00 to $140.00 and set an "overweight" rating on the stock in a research note on Friday, February 6th. Finally, JPMorgan Chase & Co. dropped their price objective on Roblox from $100.00 to $75.00 and set a "neutral" rating on the stock in a research note on Friday, February 6th. One analyst has rated the stock with a Strong Buy rating, seventeen have given a Buy rating, seven have assigned a Hold rating and two have assigned a Sell rating to the company's stock. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $116.16.

Roblox Price Performance

NYSE RBLX opened at $61.33 on Wednesday. Roblox has a fifty-two week low of $51.23 and a fifty-two week high of $150.59. The stock's 50-day moving average is $60.51 and its two-hundred day moving average is $83.00. The company has a debt-to-equity ratio of 2.65, a current ratio of 0.96 and a quick ratio of 0.96. The firm has a market cap of $41.01 billion, a P/E ratio of -39.57 and a beta of 1.67.

Roblox (NYSE:RBLX - Get Free Report) last posted its earnings results on Thursday, February 5th. The company reported ($0.45) earnings per share for the quarter, beating the consensus estimate of ($0.49) by $0.04. Roblox had a negative return on equity of 304.42% and a negative net margin of 21.78%.The company had revenue of $1.42 billion for the quarter, compared to analyst estimates of $2.08 billion. During the same period last year, the company earned ($0.33) earnings per share. The business's revenue was up 122.6% compared to the same quarter last year. On average, analysts anticipate that Roblox will post -1.61 earnings per share for the current fiscal year.

Insider Buying and Selling at Roblox

In related news, CEO David Baszucki sold 10,834 shares of Roblox stock in a transaction dated Friday, February 20th. The stock was sold at an average price of $61.63, for a total transaction of $667,699.42. Following the sale, the chief executive officer directly owned 800,539 shares of the company's stock, valued at $49,337,218.57. This trade represents a 1.34% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Mark Reinstra sold 18,653 shares of Roblox stock in a transaction dated Monday, April 13th. The stock was sold at an average price of $57.94, for a total value of $1,080,754.82. Following the sale, the insider directly owned 455,473 shares in the company, valued at approximately $26,390,105.62. This trade represents a 3.93% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 551,996 shares of company stock valued at $38,421,146 over the last quarter. Company insiders own 12.92% of the company's stock.

Institutional Investors Weigh In On Roblox

A number of institutional investors have recently added to or reduced their stakes in the company. National Pension Service raised its stake in shares of Roblox by 7.3% in the third quarter. National Pension Service now owns 1,697,820 shares of the company's stock valued at $235,182,000 after acquiring an additional 115,096 shares during the last quarter. SG Americas Securities LLC raised its position in Roblox by 298.4% in the 3rd quarter. SG Americas Securities LLC now owns 329,317 shares of the company's stock worth $45,617,000 after purchasing an additional 246,652 shares during the last quarter. Yarbrough Capital LLC raised its position in Roblox by 1,514.5% in the 4th quarter. Yarbrough Capital LLC now owns 57,331 shares of the company's stock worth $4,646,000 after purchasing an additional 53,780 shares during the last quarter. Cypress Wealth Services LLC bought a new position in Roblox in the 4th quarter worth approximately $2,373,000. Finally, Tokio Marine Asset Management Co. Ltd. bought a new position in Roblox in the 3rd quarter worth approximately $2,895,000. 94.46% of the stock is 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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