TD Cowen Issues Pessimistic Forecast for Roblox (NYSE:RBLX) Stock Price

Roblox (NYSE:RBLX) had its price target lowered by research analysts at TD Cowen from $49.00 to $40.00 in a research report issued on Friday,Benzinga reports. The brokerage presently has a “hold” rating on the stock. TD Cowen’s price target points to a potential upside of 16.60% from the stock’s current price.

A number of other analysts have also issued reports on the company. Seaport Research Partners lowered Roblox to a “neutral” rating in a research note on Monday, June 29th. Morgan Stanley set a $55.00 price target on shares of Roblox and gave the stock an “overweight” rating in a report on Friday. DA Davidson set a $40.00 price objective on shares of Roblox in a research note on Friday. Canaccord Genuity Group set a $58.00 target price on shares of Roblox in a research note on Friday. Finally, Deutsche Bank Aktiengesellschaft downgraded shares of Roblox from a “buy” rating to a “hold” rating and cut their price target for the company from $56.00 to $38.00 in a report on Friday. One investment analyst has rated the stock with a Strong Buy rating, twelve have issued a Buy rating, thirteen have given a Hold rating and four have issued a Sell rating to the company’s stock. According to MarketBeat.com, the company has a consensus rating of “Hold” and an average target price of $67.04.

Roblox Stock Performance

Roblox stock traded down $14.37 during midday trading on Friday, reaching $34.30. The stock had a trading volume of 41,520,795 shares, compared to its average volume of 11,514,866. Roblox has a 12 month low of $33.88 and a 12 month high of $150.59. The firm’s 50-day moving average price is $49.53 and its 200 day moving average price is $57.08. The firm has a market capitalization of $23.04 billion, a PE ratio of -21.85 and a beta of 1.41. 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 issued its earnings results on Thursday, July 30th. The company reported ($0.26) earnings per share for the quarter, topping analysts’ consensus estimates of ($0.34) by $0.08. The firm had revenue of $1.47 billion during the quarter, compared to analyst estimates of $1.60 billion. Roblox had a negative net margin of 20.69% and a negative return on equity of 277.69%. The company’s quarterly revenue was up 8.3% on a year-over-year basis. During the same quarter last year, the business earned ($0.41) earnings per share. As a group, research analysts predict that Roblox will post -1.39 earnings per share for the current fiscal year.

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

Insider Activity at Roblox

In related news, insider Matthew D. Kaufman sold 14,356 shares of the company’s stock in a transaction on Wednesday, May 20th. The shares were sold at an average price of $45.27, for a total value of $649,896.12. Following the completion of the transaction, the insider directly owned 349,964 shares in the company, valued at approximately $15,842,870.28. The trade was a 3.94% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Mark Reinstra sold 4,512 shares of the stock in a transaction on Monday, July 6th. The shares were sold at an average price of $57.34, for a total value of $258,718.08. Following the completion of the transaction, the insider directly owned 422,248 shares in the company, valued at approximately $24,211,700.32. This represents a 1.06% decrease in their position. 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 161,983 shares of company stock worth $7,580,990 in the last three months. 10.05% of the stock is owned by insiders.

Hedge Funds Weigh In On Roblox

A number of large investors have recently modified their holdings of the company. Reyes Financial Architecture Inc. lifted its position in Roblox by 164.4% in the 4th quarter. Reyes Financial Architecture Inc. now owns 312 shares of the company’s stock worth $25,000 after buying an additional 194 shares during the last quarter. Hanson & Doremus Investment Management bought a new position in Roblox during the first quarter valued at approximately $25,000. Fideuram Asset Management Ireland dac purchased a new position in shares of Roblox during the fourth quarter worth approximately $27,000. Basecamp Wealth Advisors LLC raised its stake in shares of Roblox by 98.8% during the first quarter. Basecamp Wealth Advisors LLC now owns 507 shares of the company’s stock worth $29,000 after acquiring an additional 252 shares in the last quarter. Finally, GW&K Investment Management LLC boosted its stake 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 valued at $30,000 after purchasing an additional 161 shares in the last quarter. 94.46% of the stock is owned by hedge funds and other institutional investors.

Key Roblox News

Here are the key news stories impacting Roblox this week:

• Positive Sentiment: Roblox reported a narrower-than-expected second-quarter loss of $0.26 per share, compared with the consensus estimate of a $0.34 loss and a $0.41 loss in the year-ago quarter. Revenue increased 8.3% year over year to $1.47 billion. Roblox Q2 earnings results
• Positive Sentiment: Management highlighted an expansion of artificial-intelligence creation tools and broader gaming initiatives, which could support developer activity, content supply and longer-term monetization if successfully implemented. Roblox Q2 earnings call highlights
• Positive Sentiment: Daily active users grew 10% year over year, indicating that Roblox continues to expand its audience despite recent engagement and discovery challenges. Roblox DAU growth
• Neutral Sentiment: Wedbush reaffirmed its Neutral rating but reduced its price target from $65 to $40, reflecting lower near-term expectations while still implying potential upside from recently depressed levels. Roblox analyst price-target changes
• Negative Sentiment: Third-quarter bookings guidance of $1.58 billion to $1.65 billion fell below Wall Street expectations. The company also projected revenue growth of only 4% to 10%, a slowdown from recent double-digit growth. Roblox bookings forecast
• Negative Sentiment: Stricter age-verification and safety changes are weighing on onboarding and engagement, while discovery and monetization adjustments are creating uncertainty around bookings growth. Roblox quarterly bookings outlook
• Negative Sentiment: Several analysts cut their forecasts after the earnings report, and media reports indicated that at least two firms assigned Sell ratings. This signals deteriorating confidence in Roblox’s near-term growth and monetization outlook. Roblox analyst downgrades
• Negative Sentiment: Multiple law firms announced or promoted securities-fraud class-action proceedings tied to alleged disclosures surrounding Roblox’s platform and age-verification impact. The allegations are not proven, but the litigation adds reputational and legal overhang. Roblox securities class action notice

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.