Head-To-Head Analysis: Roblox (NYSE:RBLX) versus Skillz (NYSE:SKLZ)

Roblox (NYSE:RBLX) and Skillz (NYSE:SKLZ) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent ratings for Roblox and Skillz, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Roblox	2	7	17	1	2.63
Skillz	1	0	2	0	2.33

Roblox presently has a consensus price target of $115.36, suggesting a potential upside of 106.01%. Skillz has a consensus price target of $15.00, suggesting a potential upside of 90.43%. Given Roblox’s stronger consensus rating and higher probable upside, research analysts clearly believe Roblox is more favorable than Skillz.

Volatility and Risk

Roblox has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500. Comparatively, Skillz has a beta of 3.08, meaning that its stock price is 208% more volatile than the S&P 500.

Institutional & Insider Ownership

94.5% of Roblox shares are owned by institutional investors. Comparatively, 19.4% of Skillz shares are owned by institutional investors. 12.9% of Roblox shares are owned by insiders. Comparatively, 38.3% of Skillz shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Roblox and Skillz’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Roblox	-21.78%	-304.42%	-12.74%
Skillz	-55.23%	-50.40%	-20.94%

Earnings and Valuation

This table compares Roblox and Skillz”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Roblox	$4.89 billion	7.66	-$1.07 billion	($1.55)	-36.13
Skillz	$104.50 million	1.18	-$70.41 million	($3.71)	-2.12

Skillz has lower revenue, but higher earnings than Roblox. Roblox is trading at a lower price-to-earnings ratio than Skillz, indicating that it is currently the more affordable of the two stocks.

Summary

Roblox beats Skillz on 10 of the 15 factors compared between the two stocks.

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. Roblox Corporation was incorporated in 2004 and is headquartered in San Mateo, California.

About Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based in San Francisco, California.