is roblox overvalued

What are Roblox stock's price targets for FY 2021 and 2022?

Roblox stock trades at consensus forward FY 2021 and FY 2022 Enterprise Value-to-Revenue multiples of 17.4 times and 14.4 times, respectively, according to the company's last traded price of $84.69 as of August 11, 2021.

Is Roblox stock a buy or sell?

Roblox stock is a Hold. I am cautiously optimistic on RBLX's growth prospects as outlined earlier in this article, but Roblox Corporation needs to execute well to capitalize on its key growth opportunities.

What is the consensus earnings estimate for Roblox stock?

For the next fiscal year, the consensus earnings estimate of -$1.18 indicates a change of -13.5% from what Roblox is expected to report a year ago. Over the past month, the estimate has changed +0.1%.

What is happening with rblx stock price?

In the past two months, RBLX's stock price has decreased by -7% from $91.04 as of June 9, 2021 to $84.69 as of August 11, 2021, following my prior update on the company that was published on June 10, 2021.

Is Roblox stock undervalued?

Undervalued Stocks: Roblox Even after the downgrade, Goldman has assigned a price target of $50 for the stock. This would imply an upside potential of 35%. Clearly, the stock is undervalued even after discounting the slowdown concerns. Beyond the near-term concerns, Roblox is possibly the best metaverse play.

Is Roblox a good stock to invest?

This is slightly above the market average, but investors should remember Roblox continues to reinvest in its platform, which is masking its full potential to generate profits. Plus, tossing out its first-quarter results, Roblox has shown a strong ability to grow its top-line bookings number over the past three years.

Is Roblox a strong Buy?

Take the market with you Roblox reported having 32.6 million daily active users at the end of 2020, up 85% from the year-ago period. Revenue jumped 82% in the year to $924 million.

Why is Roblox market cap so high?

Roblox's business model is to sell virtual dollars called Robux so users can pay for video game experiences and virtual goods. These have super-high margins, giving Roblox a lot of room for future investments while also generating profits.

Why is Roblox dropping?

Roblox stock was sinking after the videogame firm missed Wall Street's expectations for first-quarter adjusted revenue and reported a wider-than-expected net loss. Roblox (ticker: RBLX) reported bookings, a form of adjusted revenue, of $631.2 million, which was down 3% from the first quarter of 2021.

What is Roblox target price?

Stock Price TargetHigh$57.00Low$21.00Average$35.63Current Price$38.22

Is Roblox a buy Zack?

Zacks' proprietary data indicates that Roblox Corporation is currently rated as a Zacks Rank 3 and we are expecting an inline return from the RBLX shares relative to the market in the next few months.

Did Google bought Roblox?

Today at 3pm, internet search giant Google announced its aquistion of startup game studio Roblox for a purchase price of 380 million dollars. Roblox is an online building game for kids.

Why did Roblox stock tank?

Roblox in February warned investors to brace for decelerating operating trends as the world transitions out of earlier phases of the COVID-19 pandemic. That's a big reason why the stock has been lumped in with other formerly high-growth companies like Netflix that saw disproportionate sales gains in 2020 and 2021.

Is Roblox richer than Nintendo?

If you compare its statistics to the bigger guns of industry, It ranks behind Nintendo, which is valued at $53.73 Billion, Call of Duty owner Activision Blizzard at $56.27 Billion, FIFA Creator EA at $34.34 Billion, and Tencent, the backbone behind Riot and Epic Games which sits at whopping $69 Billion.

Is Roblox worth more than fortnite?

Financially, a comparison of the two is interesting. Roblox generated $920 million in 2020. The company as whole was valued at $41.9 billion when it listed on the stock exchange earlier this year. Compare this with Epic Games, the maker of Fortnite which, in a recent fundraising round, was valued at $28.7 billion.

Is Roblox worth more than EA?

EA Valuation Vs Roblox Valuation Currently, EA has a market cap of over $41 billion. While some view this as something of an undervaluation, there's no denying the facts: this is under Roblox's market cap of nearly $57 billion.

Summary

Roblox is a popular online game platform that has generated fantastic growth since coming public.

Roblox Stock Price

After pricing its initial public offering at $45 per share, RBLX closed its first day of trading at $69.50 per share. The stock briefly touched $100 per share, before falling down to $83 per share.

Is Roblox Stock Overvalued?

The case for overvaluation is rather nuanced, however, we can first start with a comparison with the peer group. RBLX trades far higher than its peer group consisting of Zynga ( ZNGA ), Take-Two Interactive ( TTWO ), Activision Blizzard ( ATVI ), and Electronic Arts ( EA ):

Is Roblox Stock A Buy, Sell, Or Hold?

One could make a more convincing argument regarding overvaluation by focusing on RBLX alone. Consensus estimates call for $2.7 billion in revenues this year:

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What is Roblox RBLX?

Roblox’s ( RBLX) vision to create a metaverse for “ human co-experience ” , powered by user-generated content (UGC) has seen the company receive accolades and brickbats at the same time. While the company has seen tremendous growth (2020 YoY revenue growth: 81.7%, 2019 YoY revenue growth: 56.4%) over the last 2 years, we think that the current valuations demanded by the market are asking for the sky and strongly encourage investors to be wary of adding the stock now.

When was Roblox first released?

It should be noted that Roblox’s initial PC release was in 2006, while its initial iOS release was in 2012. Therefore, Roblox has been operating for a long time, and yet it was still not able to garner a significant share of the U.S. mobile gaming publishers market.

Is Roblox a JV?

We acknowledge that Roblox has a JV with Tencent through Luo Bu Le Si to “ address the opportunity in China ", where Roblox holds the controlling 51% stake, while Tencent the remaining 49%. While we think the approach adopted by Tencent and Roblox in the JV using Roblox as an educational platform to spearhead Roblox’s penetration into the Chinese market is an interesting one, we are not so sure to what extent this approach would help Roblox to achieve similar levels of success in China and to what extent Tencent would allow the JV to cannibalise its own products. Therefore, while we think Tencent recognized the potential of Roblox in China, the JV merely represented one of its many hedges that it has placed (It should also be noted that Roblox is required to cooperate with a local publisher to enter the Chinese market).

Is Roblox a publisher?

While Roblox is the leading publisher in the U.S., the platform is a distant fourth in gaming revenue worldwide, behind the Chinese developers: Tencent ( OTCPK:TCEHY) and miHoYo, with Tencent as the clear undisputed leader in mobile gaming worldwide. While some investors may be quick to point out that we are comparing Roblox against a behemoth ...

Is Roblox the leader in the mobile gaming market?

While it may seem that Roblox is the mobile gaming leader in the U.S., its 5.52% market share is actually indicative of a highly fragmented market that has not accentuated Roblox’s dominance and clear leadership. It should be noted that Roblox’s initial PC release was in 2006, while its initial iOS release was in 2012.

Is Roblox a metaverse?

Summary. Roblox’s metaverse has created a lot of hype. It seems like these days, marketing is more important than fundamentals. Although Roblox is the online gaming leader in the U.S., it doesn’t look close to achieving operating profitability moving forward.

Is Roblox FCF positive?

Some investors would point out that Roblox is actually FCF positive, which we noted above. As we could see clearly, the surge in its FCF margins were largely driven by the increase in deferred revenue in 2020, while before that, FCF margins were in the single digit (LTM Q1’20: 8.5%).

Summary

I predict that Roblox will experience strong growth in the next few years, driven by aging up, international expansion and the monetization of its user base to a larger extent.

Elevator Pitch

I continue to rate Roblox Corporation's (NYSE: RBLX) shares as Neutral or Hold.

Roblox Stock Prediction

Any attempt to predict Roblox stock's future share price performance is really about making an assessment of the company's future growth prospects. In my opinion, Roblox Corporation has three key growth drivers, which I evaluate in more detail below.

Is Roblox Stock Overvalued?

Roblox stock trades at consensus forward FY 2021 and FY 2022 Enterprise Value-to-Revenue multiples of 17.4 times and 14.4 times, respectively, according to the company's last traded price of $84.69 as of August 11, 2021.

What is a RBLX?

Rob lox ( RBLX) is an online gaming platform enabling users to play and create games in a variety of genres using the company’s own proprietary programming engine, the Roblox studio. The company generates most of its revenue through micro-payments using its native Robux currency, which users purchase with real money and then use to gain other ...

Is Roblox a good company?

Roblox’s first quarterly results as a publicly listed company were surprisingly good; so good in fact that RBLX share price jumped 20% – from $64 to $77 – the day that the results were announced. The company missed on its EPS expectations, but this was about the only negative thing to come out of it.

Is Roblox defending itself?

Roblox has vowed to defend itself – but history proves that even Google’s YouTube couldn’t fudge this issue, and the outcome, however it falls, is likely to be costly for the company. Free Stock Tools - Financhill. Close. Yes.

Is Roblox a reliant app?

Also problematic is the fact that Roblox is heavily reliant on app stores for the downloading of its platform – a model which is highly vulnerable to competition pressure and the future policies of the app stores themselves.

Is Roblox an immersive game?

Yes, other applications are the best at their own thing – YouTube for video streaming, Ste am for games distribution – but no-one is creating the immersive ecosystem that Roblox is building.

Is Roblox being sued?

But there are other, more tangible risks on the horizon. The first is that Roblox is being sued by the National Music Publishers’ Association. The NMPA alleges that Roblox illegally used its members music on the gaming platform, and in the process made “hundreds of millions of dollars” off of such use.