Roblox (NYSE:RBLX) Shares Down 12.9% on Analyst Downgrade

Roblox Corporation (NYSE:RBLX)’s stock price fell 12.9% on Friday after Wedbush lowered their price target on the stock from $165.00 to $110.00. Wedbush currently has an outperform rating on the stock. Roblox traded as low as $65.53 and last traded at $65.9640. 21,395,573 shares traded hands during mid-day trading, an increase of 65% from the average session volume of 12,968,320 shares. The stock had previously closed at $75.73.

Several other equities analysts also recently weighed in on RBLX. Citigroup raised their target price on shares of Roblox from $152.00 to $155.00 and gave the company a “buy” rating in a report on Wednesday, October 8th. Needham & Company LLC restated a “buy” rating and set a $159.00 price objective on shares of Roblox in a report on Friday, October 31st. Canaccord Genuity Group set a $160.00 price target on shares of Roblox in a research report on Thursday, October 30th. UBS Group set a $155.00 price objective on Roblox in a report on Tuesday, January 13th. Finally, Roth Mkm reissued a “neutral” rating and issued a $146.00 target price on shares of Roblox in a research note on Friday, October 17th. Seventeen investment analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and three have issued a Sell rating to the stock. According to MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $131.65.

Insider Activity

In other news, insider Arvind Chakravarthy sold 20,912 shares of the company’s stock in a transaction that occurred on Thursday, November 20th. The stock was sold at an average price of $95.23, for a total transaction of $1,991,449.76. Following the completion of the transaction, the insider directly owned 181,043 shares of the company’s stock, valued at approximately $17,240,724.89. This represents a 10.35% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CFO Naveen K. Chopra sold 19,424 shares of the company’s stock in a transaction on Thursday, November 20th. The stock was sold at an average price of $95.23, for a total value of $1,849,747.52. Following the transaction, the chief financial officer owned 337,036 shares of the company’s stock, valued at approximately $32,095,938.28. The trade was a 5.45% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 504,300 shares of company stock valued at $46,290,436 over the last three months. 12.92% of the stock is currently owned by company insiders.

Roblox News Roundup

Here are the key news stories impacting Roblox this week:

• Positive Sentiment: JPMorgan flagged that Roblox’s recent stabilization in engagement trends is “encouraging,” which could support revenue visibility if usage holds steady and monetization improves. JPMorgan: Stabilization Encouraging
• Neutral Sentiment: Upcoming earnings are a near‑term catalyst: analysts expect a year‑over‑year decline in EPS and the company is due to report, so results and guidance could swing sentiment. Monitor bookings, engagement metrics and margin commentary. Analysts Expect Earnings Decline
• Neutral Sentiment: Debt and valuation context: the company carries leverage and a negative trailing P/E; some investors view recent pullbacks as a buying opportunity if engagement and monetization signals improve. Coverage pieces are debating attractiveness after the pullback. Is Roblox Still Attractive?
• Negative Sentiment: Google’s new Project Genie, which aims to let users create fully rendered 3D worlds and controllable characters, rattled gaming and creator-platform stocks today and put downward pressure on Roblox shares as investors reassess competitive risk. Google’s Project Genie Hammers Gaming Stocks
• Negative Sentiment: The Netherlands’ consumer regulator (ACM) opened a probe into Roblox over potential risks to minors and exposure to harmful content in the EU; regulatory investigations raise the prospect of fines, imposed compliance costs, or feature restrictions that could hit engagement and monetization. Dutch regulator to probe Roblox
• Negative Sentiment: Wedbush trimmed its price target from $165 to $110 (while keeping an outperform rating), a reduction that can weaken sentiment and reprice expectations even though the new target still implies upside from current levels. Wedbush Lowers Price Target

Institutional Trading of Roblox

Hedge funds and other institutional investors have recently modified their holdings of the company. Vanguard Group Inc. grew its position in Roblox by 2.6% during the second quarter. Vanguard Group Inc. now owns 59,153,925 shares of the company’s stock valued at $6,222,993,000 after purchasing an additional 1,513,608 shares in the last quarter. SG Americas Securities LLC lifted its stake in Roblox by 298.4% in the third quarter. SG Americas Securities LLC now owns 329,317 shares of the company’s stock valued at $45,617,000 after acquiring an additional 246,652 shares during the last quarter. Westfield Capital Management Co. LP acquired a new stake in shares of Roblox in the 2nd quarter valued at $120,041,000. Tokio Marine Asset Management Co. Ltd. acquired a new stake in shares of Roblox in the third quarter worth about $2,895,000. Finally, Teacher Retirement System of Texas lifted its holdings in Roblox by 14.5% in the 2nd quarter. Teacher Retirement System of Texas now owns 81,314 shares of the company’s stock worth $8,554,000 after purchasing an additional 10,325 shares during the last quarter. Institutional investors own 94.46% of the company’s stock.

Roblox Trading Down 13.5%

The company has a current ratio of 0.96, a quick ratio of 0.96 and a debt-to-equity ratio of 2.54. The company’s fifty day moving average is $83.98 and its 200-day moving average is $109.83. The firm has a market capitalization of $42.91 billion, a P/E ratio of -45.83 and a beta of 1.64.

Roblox (NYSE:RBLX) last posted its quarterly earnings data on Thursday, October 30th. The company reported ($0.37) EPS for the quarter, topping analysts’ consensus estimates of ($0.44) by $0.07. The business had revenue of $1.36 billion for the quarter, compared to analyst estimates of $1.64 billion. Roblox had a negative return on equity of 314.20% and a negative net margin of 21.70%.The firm’s revenue for the quarter was up 70.3% on a year-over-year basis. During the same period in the previous year, the company posted ($0.37) earnings per share. As a group, sell-side analysts anticipate that Roblox Corporation will post -1.49 earnings per share for the current fiscal year.

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.