Comparing Roblox (NYSE:RBLX) & Red Violet (NASDAQ:RDVT)

Red Violet (NASDAQ:RDVT) and Roblox (NYSE:RBLX) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Risk and Volatility

Red Violet has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, Roblox has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500.

Valuation & Earnings

This table compares Red Violet and Roblox”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Violet	$70.69 million	6.98	$13.53 million	$0.36	99.31
Roblox	$3.36 billion	10.92	-$1.15 billion	($1.64)	-36.87

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Red Violet	7.17%	6.80%	6.28%
Roblox	-30.90%	-986.36%	-16.20%

Analyst Recommendations

This is a summary of recent ratings and target prices for Red Violet and Roblox, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Violet	0	0	1	0	3.00
Roblox	0	7	15	1	2.74

Red Violet presently has a consensus price target of $25.00, suggesting a potential downside of 30.07%. Roblox has a consensus price target of $55.67, suggesting a potential downside of 7.94%. Given Roblox’s higher possible upside, analysts clearly believe Roblox is more favorable than Red Violet.

Insider and Institutional Ownership

63.6% of Red Violet shares are held by institutional investors. Comparatively, 94.5% of Roblox shares are held by institutional investors. 9.5% of Red Violet shares are held by company insiders. Comparatively, 22.2% of Roblox shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Roblox beats Red Violet on 8 of the 15 factors compared between the two stocks.

About Red Violet

Red Violet, Inc., a software and services company, specializes in proprietary technologies and applying analytical capabilities to deliver identity intelligence in the United States. It offers idiCORE, an investigative solution used to address various organizational challenges, which include due diligence, risk mitigation, identity authentication, fraud detection and prevention, customer acquisition, and regulatory compliance; and FOREWARN, an app-based solution that provides instant knowledge before face-to-face engagement with a consumer, as well as helps professionals to identify and mitigate risk. The company serves financial services, insurance, healthcare, retail, telecommunication companies, law enforcement and government agencies, collections, law, corporate security, and investigative firms. It markets its products and services through value-added distributors, resellers, and strategic partners; and trade shows and seminars, advertising, public relations, distribution of sales literature, and product specifications and ongoing communication with prospective customers, distributors, resellers, strategic partners, and installed base of current customers, as well as through direct sales. The company was incorporated in 2017 and is headquartered in Boca Raton, Florida.

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.