Roblox (NYSE:RBLX) Shares Gap Down – Here’s Why

Roblox Corporation (NYSE:RBLX) shares gapped down before the market opened on Monday . The stock had previously closed at $51.53, but opened at $48.20. Roblox shares last traded at $48.3770, with a volume of 2,695,935 shares trading hands.

Wall Street Analyst Weigh In

A number of brokerages have recently weighed in on RBLX. Piper Sandler lowered Roblox from an “overweight” rating to a “neutral” rating and cut their price objective for the company from $100.00 to $50.00 in a research report on Monday, May 4th. Roth Mkm set a $65.00 price target on Roblox in a report on Tuesday, May 5th. Citigroup reduced their price objective on Roblox from $90.00 to $70.00 and set a “buy” rating on the stock in a research note on Monday, May 4th. The Goldman Sachs Group lowered their target price on Roblox from $125.00 to $65.00 and set a “buy” rating for the company in a research report on Friday, May 1st. Finally, Bank of America lowered shares of Roblox from a “buy” rating to a “neutral” rating and set a $48.00 target price for the company. in a report on Friday, May 1st. One analyst has rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, fourteen have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of “Hold” and an average target price of $87.07.

Roblox Trading Down 9.8%

The stock has a market cap of $31.21 billion, a PE ratio of -29.24 and a beta of 1.44. The company has a debt-to-equity ratio of 2.45, a quick ratio of 0.89 and a current ratio of 0.89. The stock has a fifty day moving average price of $49.18 and a 200 day moving average price of $63.84.

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

Roblox announced that its Board of Directors has authorized a stock buyback plan on Tuesday, May 19th that permits the company to repurchase $3.00 billion in outstanding shares. This repurchase authorization permits the company to buy up to 9.5% of its shares through open market purchases. Shares repurchase plans are typically an indication that the company’s management believes its stock is undervalued.

Insider Transactions at Roblox

In related news, CEO David Baszucki sold 50,628 shares of the company’s stock in a transaction dated Wednesday, May 20th. The shares were sold at an average price of $45.28, for a total transaction of $2,292,435.84. Following the transaction, the chief executive officer directly owned 852,214 shares in the company, valued at approximately $38,588,249.92. This represents a 5.61% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Sean Jack Buckley sold 4,744 shares of the stock in a transaction dated Friday, May 22nd. The stock was sold at an average price of $46.36, for a total transaction of $219,931.84. Following the completion of the sale, the insider directly owned 97,141 shares in the company, valued at $4,503,456.76. This trade represents a 4.66% 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. In the last ninety days, insiders have sold 189,449 shares of company stock worth $9,179,410. 10.05% of the stock is currently owned by insiders.

Institutional Trading of Roblox

A number of large investors have recently made changes to their positions in the stock. Reyes Financial Architecture Inc. grew its holdings in shares of Roblox by 164.4% in the fourth quarter. Reyes Financial Architecture Inc. now owns 312 shares of the company’s stock worth $25,000 after purchasing an additional 194 shares during the last quarter. Hanson & Doremus Investment Management purchased a new position in shares of Roblox during the first quarter worth approximately $25,000. Fideuram Asset Management Ireland dac bought a new stake in Roblox during the 4th quarter valued at $27,000. GW&K Investment Management LLC lifted its holdings in shares of Roblox by 76.3% in the 4th quarter. GW&K Investment Management LLC now owns 372 shares of the company’s stock worth $30,000 after buying an additional 161 shares during the period. Finally, Indiana Trust & Investment Management Co bought a new position in shares of Roblox during the 4th quarter worth $32,000. 94.46% of the stock is owned by hedge funds and other institutional investors.

Roblox Company Profile

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.