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

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

Insider and Institutional Ownership

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

Profitability

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

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Skillz and Roblox, as reported by MarketBeat.com.

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

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

Risk & Volatility

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

Valuation & Earnings

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

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

Skillz has higher earnings, but lower revenue 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 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.

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.