At least 16 analysts who are offering a 12-month price target for Roblox over the last three months give the stock an average price target of around $37. This is not nearly the median estimate as the high forecast has been set around $61 with a low forecast of $21. The last price was $39.99 so this estimate represents a change of -6.08 percent.
Roughly half of this particular collection of analysts would give Roblox stock (NYSE: RBLX) a BUY rating. Another quarter would consider the stock overweight and about the same amount would give it a HOLD rating.
RBLX Share Value Has Been Trending Down The Past Year
This appears to have been the trend, for the most part, over the past few months. In April, Roblox stock received zero hold ratings but in May and June Hold, Buy, and Strong Buy ratings have been mostly comparable. As a matter of fact, while each rating recommendation has been increasing, their ratio has remained mostly the same for at least the last year.
October, 2021 ended with the most recent high of $126.1. This is almost near the 52-week high of $141.60. The 52-week low is $21.60; so the range for the year has been quite dramatic. Fortunately, the day-range appears far less volatile, at $37.41 to $40.00.
Furthermore, the 3-month performance is down 17.3 percent with year-to-date down more than 63.2 percent. The 1-year performance metric is down more than 56.3 percent.
On the other hand, the 5-day performance average is up more than 8 percent with the 1-month performance up nearly 22 percent. This does seem to indicate that while the stock has suffered steady losses since Q4 2021, share value has been on a slow, but steady decline since earlier this year. This could be an indication that the stock is poised to bounce back soon, hence all the BUY and HOLD ratings.
Earnings Per Share is Also on a Decline
Earnings per share have been in decline the past couple years, and this trend is expected to continue. For quarters 2 and 3 of 2021, the average EPS estimate was about $0.12. Actual EPS for these periods, though, were losses of -$0.25 and -$0.13, respectively. This margin is improving, however, as Q4 2021 registered an actual EPS of -$0.25 instead of the estimated loss of -$0.12. By first quarter of this year, 2022, the actual EPS loss of -$0.27 was still down from the estimate, but at a much better interval of -0.05.
Upcoming earnings report is expected on August 15. So far this year, though, revenue is up nearly 51 percent, from $1.92 billion last year, to 2.89 billion. The report may also likely indicate that revenue for next year is expected to grow, again, by another 14.3 percent, to $3.300 billion. In fact, revenue has grown between 14 and 107 percent every year since 2018.
That said, EPS for this year is expected to sink more than last year, from -$0.97 last year to -$1.03 this year. Next year, EPS will continue to decline, to -$1.13.
What is Roblox?
Roblox is an online platform whose mission is “to bring the world together through play.” The service brings together all kinds of casual players to explore vast, immersive 3D experiences; to imagine and create among a global community of developers. These developers can produce their own multiplayer experiences, with more new opportunities published every month using the intuitive Roblox desktop design tool.
The Roblox platform is actually ranked as one of the top online entertainment platforms around the world for audience under the age of 18, based on both average monthly visits and time spent (also known as Comscore). Their popularity is driven uniquely by interaction from the community, which is characterized by the several million people who sign up through traditional word-of-mouth marketing.
Roblox has allowed more than 29 million developers to publish their projects online, cumulatively. This has resulted in at least 30.4 million unique user experiences who have spent 106 billion cumulative hours engaged with the site. Perhaps most importantly, the online platform has generated a cumulative earnings of approximately $1 billion for developers.
As a company, Roblox went public on March 11, 2021, and its IPO soared beyond all expectations. In fact, on its first day of trading, share price skyrocketed 54 percent, from its suggested price of $45 to $69.90 by close of day. By the end of its first week, Roblox had a market value of approximately $39.50.
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