Roblox (NYSE:RBLX) vs. Electronic Arts (NASDAQ:EA) Critical Survey

Electronic Arts (NASDAQ:EA) and Roblox (NYSE:RBLX) are both large-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Earnings and Valuation

This table compares Electronic Arts and Roblox”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Electronic Arts	$7.46 billion	6.83	$1.12 billion	$2.66	76.54
Roblox	$4.89 billion	8.14	-$1.07 billion	($1.55)	-38.80

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Electronic Arts	9.31%	23.53%	11.78%
Roblox	-21.78%	-304.42%	-12.74%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Electronic Arts	1	19	3	0	2.09
Roblox	2	7	17	1	2.63

Electronic Arts currently has a consensus price target of $188.30, suggesting a potential downside of 7.51%. Roblox has a consensus price target of $117.52, suggesting a potential upside of 95.42%. Given Roblox’s stronger consensus rating and higher probable upside, analysts clearly believe Roblox is more favorable than Electronic Arts.

Risk and Volatility

Electronic Arts has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, Roblox has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500.

Institutional & Insider Ownership

90.2% of Electronic Arts shares are held by institutional investors. Comparatively, 94.5% of Roblox shares are held by institutional investors. 0.2% of Electronic Arts shares are held by insiders. Comparatively, 12.9% of Roblox shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Roblox beats Electronic Arts on 8 of the 15 factors compared between the two stocks.

About Electronic Arts

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and license games from others, including FIFA, Madden NFL, UFC, and Star Wars brands. The company licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, 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.