Spotify Technology (NYSE:SPOT – Get Free Report) and Roblox (NYSE:RBLX – Get Free Report) are both large-cap communication services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.
Risk & Volatility
Spotify Technology has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500. Comparatively, Roblox has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.
Profitability
This table compares Spotify Technology and Roblox’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Spotify Technology | 15.74% | 36.15% | 21.35% |
| Roblox | -17.60% | -292.85% | -10.13% |
Analyst Ratings
This is a breakdown of current recommendations for Spotify Technology and Roblox, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Spotify Technology | 1 | 9 | 23 | 1 | 2.71 |
| Roblox | 5 | 13 | 12 | 1 | 2.29 |
Spotify Technology presently has a consensus target price of $620.07, indicating a potential upside of 6.20%. Roblox has a consensus target price of $57.22, indicating a potential upside of 7.97%. Given Roblox’s higher probable upside, analysts plainly believe Roblox is more favorable than Spotify Technology.
Valuation & Earnings
This table compares Spotify Technology and Roblox”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Spotify Technology | $18.81 billion | 6.39 | $2.50 billion | $15.08 | 38.72 |
| Roblox | $4.89 billion | 7.26 | -$1.07 billion | ($1.43) | -37.06 |
Spotify Technology has higher revenue and earnings than Roblox. Roblox is trading at a lower price-to-earnings ratio than Spotify Technology, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
84.1% of Spotify Technology shares are held by institutional investors. Comparatively, 94.5% of Roblox shares are held by institutional investors. 0.4% of Spotify Technology shares are held by insiders. Comparatively, 10.1% of Roblox shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
Spotify Technology beats Roblox on 10 of the 14 factors compared between the two stocks.
About Spotify Technology
Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. This segment sells directly to the end users. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its users on their computers, tablets, and compatible mobile devices. The company also offers sales, distribution and marketing, contract research and development, and customer and other support services. Spotify Technology S.A. was incorporated in 2006 and is based in Luxembourg City, Luxembourg.
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.
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