Wall Street Zen Downgrades Roblox (NYSE:RBLX) to Sell

Roblox (NYSE:RBLX) was downgraded by Wall Street Zen from a “hold” rating to a “sell” rating in a note issued to investors on Saturday.

A number of other research analysts have also recently commented on RBLX. Canaccord Genuity Group cut their price target on shares of Roblox from $140.00 to $80.00 and set a “buy” rating for the company in a research note on Friday, May 1st. Weiss Ratings restated a “sell (e+)” rating on shares of Roblox in a research note on Friday, March 27th. Barclays cut their price target on shares of Roblox from $115.00 to $60.00 and set an “equal weight” rating for the company in a research note on Friday, May 1st. Wells Fargo & Company cut their price target on shares of Roblox from $97.00 to $78.00 and set an “overweight” rating for the company in a research note on Monday, April 6th. Finally, Citigroup cut their target price on shares of Roblox from $90.00 to $70.00 and set a “buy” rating for the company in a research note on Monday, May 4th. One equities research analyst has rated the stock with a Strong Buy rating, twelve have given a Buy rating, fourteen have given a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, Roblox has an average rating of “Hold” and a consensus price target of $87.07.

Roblox Stock Up 0.6%

Shares of RBLX opened at $47.10 on Friday. The stock has a market cap of $31.63 billion, a price-to-earnings ratio of -29.81 and a beta of 1.50. The company has a quick ratio of 0.89, a current ratio of 0.89 and a debt-to-equity ratio of 2.45. Roblox has a 12 month low of $40.15 and a 12 month high of $150.59. The company has a 50-day moving average price of $52.48 and a two-hundred day moving average price of $69.51.

Roblox (NYSE:RBLX) last announced its quarterly earnings results on Thursday, April 30th. The company reported ($0.35) EPS for the quarter, topping analysts’ consensus estimates of ($0.41) by $0.06. The firm had revenue of $1.44 billion during the quarter, compared to analysts’ expectations of $1.74 billion. Roblox had a negative net margin of 20.69% and a negative return on equity of 277.69%. The company’s revenue for the quarter was up 43.4% compared to the same quarter last year. During the same quarter last year, the company earned ($0.32) earnings per share. Equities analysts predict that Roblox will post -1.4 EPS for the current fiscal year.

Roblox declared that its board has initiated a share repurchase plan on Tuesday, May 19th that permits the company to repurchase $3.00 billion in shares. This repurchase authorization permits the company to reacquire up to 9.5% of its stock through open market purchases. Stock repurchase plans are usually a sign that the company’s management believes its stock is undervalued.

Insider Buying and Selling

In other news, CEO David Baszucki sold 50,628 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 $2,292,435.84. Following the completion of the transaction, the chief executive officer owned 852,214 shares in the company, valued at approximately $38,588,249.92. The trade was a 5.61% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Matthew D. Kaufman sold 14,356 shares of Roblox stock in a transaction that occurred on Wednesday, May 20th. The shares were sold at an average price of $45.27, for a total transaction of $649,896.12. Following the completion of the transaction, the insider owned 349,964 shares of the company’s stock, valued at $15,842,870.28. This trade represents a 3.94% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 183,471 shares of company stock valued at $8,930,068 in the last ninety days. 10.05% of the stock is owned by corporate insiders.

Institutional Trading of Roblox

A number of hedge funds and other institutional investors have recently modified their holdings of RBLX. Norges Bank acquired a new stake in shares of Roblox in the fourth quarter valued at approximately $435,424,000. Vanguard Group Inc. increased its holdings in shares of Roblox by 5.6% in the third quarter. Vanguard Group Inc. now owns 62,437,998 shares of the company’s stock valued at $8,648,911,000 after purchasing an additional 3,284,073 shares in the last quarter. SRS Investment Management LLC acquired a new stake in shares of Roblox in the fourth quarter valued at approximately $238,065,000. Amundi increased its holdings in shares of Roblox by 83.7% in the first quarter. Amundi now owns 5,774,151 shares of the company’s stock valued at $326,586,000 after purchasing an additional 2,631,074 shares in the last quarter. Finally, Capital International Investors increased its holdings in shares of Roblox by 7.3% in the fourth 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. Institutional investors and hedge funds own 94.46% of the company’s stock.

About Roblox

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.