What's Weighing on Roblox Stock Right Now

RBLX is down over 50% since the start of the year

Mar 24, 2022 at 12:14 PM
facebook twitter linkedin

On March 15, the senior leadership team at Roblox Corporation (NYSE:RBLX)  released some key metrics for February 2022. RBLX reported 55.1 million daily users, up 28% year-over-year. The firm also reported 3.8 billion hours of engagement for the month of February, up 21% year-over-year. On the other hand, RBLX's estimated bookings were down 2%- 4% year-over-year. 

Digging deeper, RBLX reported $1.92 billion in revenues for fiscal 2021, marking 108% growth since fiscal 2020 and a 490% increase since fiscal 2018. Roblox also reported roughly $491.7 million in net losses for fiscal 2021, marking a $240 million decrease since fiscal 2020 and a $404 million decrease since fiscal 2018.

Roblox’s earnings are estimated to drop $0.14 for fiscal 2022, going from an EPS (earnings per share) of -$0.85 down to -$0.99. The gaming company is also estimated to grow revenues 22% for fiscal 2022, which is significantly lower than the previous year’s growth rates.

Still, RBLX maintains a strong balance sheet with $3 billion in cash and $1.23 billion in total debt, providing some security for the business’s longevity. However, Roblox stock continues to be overvalued at a price-sales ratio of 13.37, despite RBLX dropping significantly in value over the past 12 months.

In fact, the stock has shed 52% this year, and is down 23% in the last 12 months, dropping dramatically from its Nov. 22 record high of $141.59. Last seen down 2.3% at $49.50, RBLX has more than halved, as it tries to distance itself from its record low of $36.33, hit on March 14. While it's broken back above the 20-day moving average, the overhead 40-day rejected the stock's rally attempt during yesterday's session. 

rblx march 24

Analysts have remained optimistic, despite Roblox stock's poor performance. Of the 10 in coverage, seven call RBLX a "buy" or better. Plus, the 12-month consensus price target of $69.43 is a 41.4% premium to current levels. 

Short sellers have also been targeting the stock, however. Short interest rose 22.4% in the last two reporting period and now makes up 4.6% of the stock's available float, or a day's worth of pent-up buying power. 


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Best stocks for October and worst stocks for October


Special Offers from Schaeffer's Trading Partners