Reviewing Roblox (NYSE:RBLX) & Netflix (NASDAQ:NFLX)

Netflix (NASDAQ:NFLX) and Roblox (NYSE:RBLX) are both large-cap communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Volatility & Risk

Netflix has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500. Comparatively, Roblox has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Institutional and Insider Ownership

80.9% of Netflix shares are owned by institutional investors. Comparatively, 94.5% of Roblox shares are owned by institutional investors. 1.2% of Netflix shares are owned by insiders. Comparatively, 10.1% of Roblox shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Netflix and Roblox, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Netflix	1	16	34	4	2.75
Roblox	3	15	12	1	2.35

Netflix currently has a consensus price target of $96.65, indicating a potential upside of 23.52%. Roblox has a consensus price target of $60.89, indicating a potential upside of 40.92%. Given Roblox’s higher possible upside, analysts clearly believe Roblox is more favorable than Netflix.

Earnings and Valuation

This table compares Netflix and Roblox”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Netflix	$45.18 billion	7.21	$10.98 billion	$3.18	24.61
Roblox	$4.89 billion	5.92	-$1.07 billion	($1.43)	-30.22

Netflix has higher revenue and earnings than Roblox. Roblox is trading at a lower price-to-earnings ratio than Netflix, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Netflix and Roblox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Netflix	28.22%	40.02%	19.81%
Roblox	-17.60%	-292.85%	-10.13%

Summary

Netflix beats Roblox on 12 of the 15 factors compared between the two stocks.

About Netflix

Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. It has operations in approximately 190 countries. The company was incorporated in 1997 and is headquartered in Los Gatos, California.

About Roblox

Roblox Corporation develops and operates an online entertainment platform in the United States and internationally. It offers Roblox Studio, a free toolset that allows developers and creators to build, publish, and operate 3D experiences, and other content; Roblox Client, an application that allows users to explore 3D experience; and Roblox Cloud, which provides services and infrastructure that power the platform. Roblox Corporation was incorporated in 2004 and is headquartered in San Mateo, California.