Stock Analysis

Amidst increasing losses, Investors bid up Roblox (NYSE:RBLX) 9.1% this past week

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Roblox Corporation (NYSE:RBLX) shareholders will doubtless be very grateful to see the share price up 58% in the last quarter. The stock is actually down over the last year. But on the bright side, its return of 12%, is better than the market, which is down 0.13355170430634.

Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for Roblox

Roblox wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Roblox saw its revenue grow by 16%. That's definitely a respectable growth rate. While the share price drop of 12% over twelve months certainly won't delight holders, it's not bad in a weak market. We'd venture the revenue growth helped inspire some faith from holders. So growth investors might like to put this one on the watchlist to see if revenue keeps trending in the right direction.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

NYSE:RBLX Earnings and Revenue Growth March 18th 2023

Roblox is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Roblox stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

While they no doubt would have preferred make a profit, at least Roblox shareholders didn't do too badly in the last year. Their loss of 12%, actually beat the broader market, which lost around 13%. On the plus side, the share price has bounced a full 58% in the last three months. The recent uptick could be an early suggestion that the prior falls were too extreme; but we'll need to see how the business progresses. It's always interesting to track share price performance over the longer term. But to understand Roblox better, we need to consider many other factors. For instance, we've identified 5 warning signs for Roblox (1 is a bit unpleasant) that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

What are the risks and opportunities for Roblox?

Roblox Corporation develops and operates an online entertainment platform.

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  • Revenue is forecast to grow 17.59% per year


  • Earnings are forecast to decline by an average of 5.2% per year for the next 3 years

  • Shareholders have been diluted in the past year

  • Significant insider selling over the past 3 months

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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