Roblox (NYSE:RBLX) Stock Price Up 9% – Here’s Why

Roblox Corporation (NYSE:RBLX) traded up 9% during mid-day trading on Monday . The company traded as high as $46.24 and last traded at $46.6880. 2,109,332 shares changed hands during mid-day trading, a decline of 82% from the average session volume of 11,806,612 shares. The stock had previously closed at $42.85.

Wall Street Analyst Weigh In

A number of equities analysts have commented on RBLX shares. Deutsche Bank Aktiengesellschaft set a $115.00 target price on Roblox in a research note on Tuesday, January 20th. TD Cowen raised Roblox from a “sell” rating to a “hold” rating and cut their price target for the stock from $54.00 to $49.00 in a report on Friday, May 1st. Freedom Capital upgraded Roblox from a “hold” rating to a “strong-buy” rating in a research report on Friday, February 6th. The Goldman Sachs Group lowered their price objective on Roblox from $125.00 to $65.00 and set a “buy” rating for the company in a research note on Friday, May 1st. Finally, BTIG Research lowered Roblox from a “buy” rating to a “neutral” rating in a research report on Friday, May 1st. One investment analyst has rated the stock with a Strong Buy rating, twelve have given a Buy rating, fourteen have assigned a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the stock has a consensus rating of “Hold” and a consensus price target of $87.17.

Roblox Stock Down 5.7%

The firm has a market cap of $29.76 billion, a price-to-earnings ratio of -28.05 and a beta of 1.50. The stock’s 50 day moving average is $54.39 and its 200 day moving average is $72.64. 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 (NYSE:RBLX) last released its earnings results on Thursday, April 30th. The company reported ($0.35) earnings per share for the quarter, topping analysts’ consensus estimates 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 the consensus estimate of $1.74 billion. During the same period in the prior year, the firm posted ($0.32) earnings per share. The firm’s revenue for the quarter was up 43.4% compared to the same quarter last year. Analysts forecast that Roblox Corporation will post -1.4 EPS for the current year.

Roblox announced that its Board of Directors has approved a stock repurchase program on Tuesday, May 19th that allows the company to repurchase $3.00 billion in outstanding shares. This repurchase authorization allows the company to repurchase up to 9.5% of its stock through open market purchases. Stock repurchase programs are typically an indication that the company’s management believes its shares are undervalued.

Insider Buying and Selling at Roblox

In related news, insider Mark Reinstra sold 18,653 shares of the stock in a transaction that occurred on Monday, April 13th. The shares were sold at an average price of $57.94, for a total transaction of $1,080,754.82. Following the completion of the sale, the insider directly owned 455,473 shares of the company’s stock, valued at $26,390,105.62. This represents a 3.93% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Gregory Baszucki sold 16,666 shares of the firm’s stock in a transaction that occurred on Tuesday, May 5th. The stock was sold at an average price of $44.97, for a total transaction of $749,470.02. Following the sale, the director owned 1,294,501 shares of the company’s stock, valued at $58,213,709.97. The trade was a 1.27% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 76,144 shares of company stock valued at $4,235,769 over the last 90 days. Insiders own 10.05% of the company’s stock.

Institutional Investors Weigh In On Roblox

Large investors have recently modified their holdings of the stock. Vanguard Group Inc. raised its position 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 worth $5,142,065,000 after purchasing an additional 1,020,786 shares during the period. Capital International Investors boosted its position in shares of Roblox by 7.3% in 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 during the period. Morgan Stanley increased its stake in 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 in the last quarter. State Street Corp increased its stake in 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 Roblox by 4.7% during the 4th quarter. Geode Capital Management LLC now owns 12,220,045 shares of the company’s stock worth $988,002,000 after buying an additional 547,103 shares during the period. 94.46% of the stock is owned by institutional investors.

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.