Cut These 2 Stocks From Your Portfolio Right Now

: RBLX | Roblox Corp. News, Ratings, and Charts

RBLX – The Fed succeeding in a ‘soft landing’ seems unlikely. Analysts are expecting a recession soon. So, with the rising odds of the Fed raising rates aggressively, it could be wise to steer clear of fundamentally weak stocks Roblox (RBLX) and Affirm Holdings (AFRM). Read on….

The stubbornly high inflation is prompting the Fed to continue with its aggressive rate hikes. And the persistent monetary policy tightening is expected to eventually push the economy into a recession.

IMF spokesman Gerry Rice expects major economies, including the United States, to slip into recession by 2023. Therefore, corporate financials are expected to remain under pressure. Goldman Sachs analysts expect the S&P 500’s net profit margin to fall 25 bps in 2023.

Furthermore, according to Charles Schwab analysts, “Many leading indicators of economic activity have started to decelerate, making a soft landing increasingly unlikely.”

Therefore, it could be wise to steer clear of fundamentally weak stocks Roblox Corporation (RBLX) and Affirm Holdings, Inc. (AFRM).

Roblox Corporation (RBLX)

RBLX develops and operates an online entertainment platform. The company offers Roblox Studio, Roblox Client, Roblox Education, and Roblox Cloud. It serves customers in the United States, the United Kingdom, Canada, Europe, China, the Asia-Pacific, and internationally.

RBLX’s revenue came in at $591.21 million for the second quarter ended June 30, 2022, up 30.2% year-over-year. However, its loss from operations came in at $170.27 million, up 19.1% year-over-year. Also, its net loss came in at $176.44 million, up 25.9% year-over-year. Moreover, its adjusted EBITDA came in at $54.64 million, down 69.7% year-over-year.

RBLX’s forward EV/S of 8.03x is 308.5% higher than the industry average of 1.97x. Its forward P/S of 8.11x is 549.1% higher than the industry average of 1.25x.

RBLX’s EPS is expected to decline 17.5% year-over-year to negative $1.14 in 2022. Its EPS is estimated to remain negative in 2023. It missed EPS estimates in three of the four trailing quarters. Over the past month, the stock has lost 13.1% to close the last trading session at $37.11.

RBLX’s POWR Ratings reflect its poor prospects. It has an overall grade of F, which indicates a Strong Sell. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Also, the stock has an F grade for Stability and a D grade for Growth, Value, Momentum, and Sentiment. Click here to access the additional POWR Ratings for RBLX (Quality). RBLX is ranked last among 22 stocks in the Entertainment – Toys & Video Games industry.

Affirm Holdings, Inc. (AFRM)

AFRM operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. The company’s platform includes point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app.

AFRM’s net total revenue came in at $1.35 billion for the year ended June 30, 2022, up 55% year-over-year. However, its comprehensive loss came in at $721.34 million, up 66.2% year-over-year. Its operating loss came in at $866.05 million, up 125.7% year-over-year.

AFRM’s forward EV/S of 5.29x is 103.1% higher than the industry average of 2.60x, while its forward P/S of 3.84x is 52.2% higher than the industry average of 2.52x.

AFRM’s EPS is expected to fall 15.9% year-over-year to negative $2.91 in 2023. Its EPS is estimated to remain negative in 2024. In addition, it missed EPS estimates in three of the four trailing quarters. Over the past month, the stock has lost 26.6% to close the last trading session at $22.70.

AFRM’s POWR Ratings are consistent with this bleak outlook. The stock has an overall F grade, equating to a Strong Sell in our proprietary rating system. Also, it has an F grade for Stability and Sentiment and a D for Value and Quality.

Click here to access the AFRM ratings for Growth and Momentum. It is ranked #78 out of 81 stocks in the D-rated Technology – Services industry.


RBLX shares were trading at $36.87 per share on Tuesday afternoon, down $0.24 (-0.65%). Year-to-date, RBLX has declined -64.26%, versus a -18.65% rise in the benchmark S&P 500 index during the same period.


About the Author: Riddhima Chakraborty


Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
RBLXGet RatingGet RatingGet Rating
AFRMGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Bears Back in Charge...What Happens Next?

A month ago the bulls were claiming victory as they created a charge back over 4,000 for the S&P 500 (SPY). Since then that false narrative has been peeled away and investors are more honestly looking at the bleak outlook formed by high inflation and a hawkish Fed. That explains why we are back retesting the June lows. Now we have to ponder what comes next and how to trade our way to profits. Read on below for the full story...

:  |  News, Ratings, and Charts

2 Warren Buffett Stocks to Buy and Never Sell

Warren Buffett’s long-term value investing strategy serves as a guide for investors to ensure high returns. With the market volatility becoming more severe after the Fed’s recent interest rate hike, Buffett’s top holdings could be ideal investments for long-term investors. To that end, buying and holding Johnson & Johnson (JNJ) and United Parcel Service (UPS) could be wise. Continue reading…

:  |  News, Ratings, and Charts

3 Stocks That’ll Help You Score Big No Matter What Happens Next

The Fed launched another 75-basis-point rate hike this week and signaled it would keep increasing rates until inflation is under control. The consecutive rate hikes are raising recession concerns. We think fundamentally solid stocks Bristol-Myers (BMY), AT&T (T), and Gilead Sciences (GILD), which have the potential to deliver steady returns despite market uncertainties, could be ideal buys now. Keep reading…

:  |  News, Ratings, and Charts

The Most Sought-After Tech Stock to Buy Right Now

Shares of Microsoft (MSFT) have shed more than 25% year-to-date, with the rising interest rates causing a massive tech sell-off. However, the current low price level allows long-term investors to take a position in the stock to benefit from its solid growth prospects. The company has guided double-digit growth for fiscal 2023. Moreover, MSFT has been increasingly paying dividends, which should help generate a steady income stream. Read more…

:  |  News, Ratings, and Charts

3 Stocks That’ll Help You Score Big No Matter What Happens Next

The Fed launched another 75-basis-point rate hike this week and signaled it would keep increasing rates until inflation is under control. The consecutive rate hikes are raising recession concerns. We think fundamentally solid stocks Bristol-Myers (BMY), AT&T (T), and Gilead Sciences (GILD), which have the potential to deliver steady returns despite market uncertainties, could be ideal buys now. Keep reading…

Read More Stories

More Roblox Corp. (RBLX) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All RBLX News