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

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

RBLX has been the subject of several other reports. Oppenheimer reiterated an “outperform” rating and issued a $125.00 target price (up from $80.00) on shares of Roblox in a research note on Wednesday, June 18th. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Roblox in a report on Saturday, September 27th. JPMorgan Chase & Co. increased their target price on shares of Roblox from $150.00 to $160.00 and gave the stock an “overweight” rating in a research note on Monday, September 22nd. Wolfe Research upgraded Roblox from a “peer perform” rating to an “outperform” rating and set a $150.00 target price on the stock in a research report on Friday, August 22nd. Finally, Arete Research set a $116.00 price target on Roblox in a research note on Tuesday, September 9th. Twenty equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and three have assigned a Sell rating to the company. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average price target of $126.72.

Roblox Stock Down 7.9%

Shares of RBLX opened at $122.91 on Friday. The company has a market capitalization of $79.28 billion, a price-to-earnings ratio of -85.95 and a beta of 1.63. Roblox has a 52 week low of $37.50 and a 52 week high of $150.59. The stock’s 50-day moving average price is $128.89 and its 200-day moving average price is $99.42. The company has a quick ratio of 0.97, a current ratio of 0.97 and a debt-to-equity ratio of 2.94.

Roblox (NYSE:RBLX) last announced 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). Roblox had a negative net margin of 23.67% and a negative return on equity of 372.96%. The company had revenue of $1.44 billion for the quarter, compared to analysts’ expectations of $1.20 billion. During the same quarter in the prior year, the business posted ($0.32) earnings per share. The firm’s revenue was up 50.5% compared to the same quarter last year. Roblox has set its FY 2025 guidance at EPS. Q3 2025 guidance at EPS. On average, sell-side analysts predict that Roblox will post -1.49 EPS for the current year.

Insider Activity at Roblox

In related news, Director Anthony P. Lee sold 111,112 shares of Roblox stock in a transaction dated Friday, August 1st. The stock was sold at an average price of $131.01, for a total value of $14,556,783.12. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, insider Matthew D. Kaufman sold 6,000 shares of the business’s stock in a transaction that occurred on Thursday, September 18th. The stock was sold at an average price of $136.55, for a total value of $819,300.00. Following the sale, the insider owned 278,642 shares of the company’s stock, valued at approximately $38,048,565.10. This trade represents a 2.11% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 366,876 shares of company stock valued at $47,386,869. 12.92% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Roblox

Several institutional investors and hedge funds have recently added to or reduced their stakes in RBLX. AQR Capital Management LLC grew its holdings in shares of Roblox by 217.4% during the first quarter. AQR Capital Management LLC now owns 8,770,427 shares of the company’s stock worth $504,387,000 after buying an additional 6,007,322 shares in the last quarter. Vanguard Group Inc. boosted its position in Roblox by 8.3% during the first quarter. Vanguard Group Inc. now owns 57,640,317 shares of the company’s stock worth $3,359,854,000 after acquiring an additional 4,400,624 shares during the last quarter. Norges Bank acquired a new position in Roblox during the second quarter worth about $350,720,000. Ninety One UK Ltd purchased a new stake in Roblox during the 1st quarter valued at about $137,379,000. Finally, Ieq Capital LLC raised its holdings in Roblox by 13.8% in the 1st quarter. Ieq Capital LLC now owns 18,889,973 shares of the company’s stock valued at $1,101,097,000 after acquiring an additional 2,297,350 shares during the last quarter. Institutional investors and hedge funds own 94.46% of the company’s stock.

About Roblox

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.