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

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Roblox	$3.36 billion	11.16	-$1.15 billion	($1.64)	-37.69
Red Violet	$70.69 million	6.99	$13.53 million	$0.36	99.47

Red Violet has lower revenue, but higher earnings 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.

Analyst Recommendations

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

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

Roblox presently has a consensus price target of $55.67, indicating a potential downside of 9.94%. Red Violet has a consensus price target of $25.00, indicating a potential downside of 30.19%. Given Roblox’s higher possible upside, equities research analysts plainly believe Roblox is more favorable than Red Violet.

Risk & Volatility

Roblox has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500. Comparatively, Red Violet has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.

Profitability

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

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

Institutional and Insider Ownership

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

Summary

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

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.

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.