Analyzing Roblox (NYSE:RBLX) and Skillz (NYSE:SKLZ)

Roblox (NYSE:RBLX) and Skillz (NYSE:SKLZ) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Institutional & Insider Ownership

94.5% of Roblox shares are owned by institutional investors. Comparatively, 19.4% of Skillz shares are owned by institutional investors. 12.9% of Roblox shares are owned by company insiders. Comparatively, 38.3% of Skillz shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Roblox	-21.78%	-304.42%	-12.74%
Skillz	-55.23%	-50.40%	-20.94%

Analyst Recommendations

This is a summary of current ratings and target prices for Roblox and Skillz, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Roblox	2	7	17	1	2.63
Skillz	1	0	2	0	2.33

Roblox currently has a consensus price target of $116.76, suggesting a potential upside of 90.39%. Skillz has a consensus price target of $15.00, suggesting a potential upside of 320.05%. Given Skillz’s higher possible upside, analysts plainly believe Skillz is more favorable than Roblox.

Risk & Volatility

Roblox has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500. Comparatively, Skillz has a beta of 3.08, indicating that its share price is 208% more volatile than the S&P 500.

Valuation & Earnings

This table compares Roblox and Skillz”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Roblox	$4.89 billion	8.39	-$1.07 billion	($1.55)	-39.57
Skillz	$104.50 million	0.53	-$70.41 million	($3.71)	-0.96

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

Summary

Roblox beats Skillz on 9 of the 15 factors compared between the two stocks.

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.

About Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based in San Francisco, California.