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
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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. 

 

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