Roblox (NYSE:RBLX) versus PowerSchool (NYSE:PWSC) Financial Review

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

Volatility & Risk

PowerSchool has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, Roblox has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Earnings and Valuation

This table compares PowerSchool and Roblox’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PowerSchool	$740.86 million	6.24	-$31.14 million	($0.24)	-94.52
Roblox	$3.16 billion	8.04	-$1.15 billion	($1.86)	-23.08

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PowerSchool	-7.51%	6.10%	2.83%
Roblox	-34.12%	-1,187.59%	-17.42%

Analyst Ratings

This is a breakdown of current recommendations and price targets for PowerSchool and Roblox, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PowerSchool	0	10	3	0	2.23
Roblox	0	8	13	1	2.68

PowerSchool currently has a consensus target price of $24.02, indicating a potential upside of 5.88%. Roblox has a consensus target price of $44.15, indicating a potential upside of 2.84%. Given PowerSchool’s higher possible upside, equities research analysts clearly believe PowerSchool is more favorable than Roblox.

Institutional & Insider Ownership

65.3% of PowerSchool shares are owned by institutional investors. Comparatively, 91.1% of Roblox shares are owned by institutional investors. 0.6% of PowerSchool shares are owned by company insiders. Comparatively, 22.2% of Roblox shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Roblox beats PowerSchool on 9 of the 15 factors compared between the two stocks.

About PowerSchool

PowerSchool Holdings, Inc., together with its subsidiaries, offers cloud-based software to the K-12 education market in the United States, Canada, and internationally. Its solution embedded in school workflows and is used on daily basis by educators, students, administrators, and parents in schools and districts. In addition, the company provides cloud-based technology platform helps schools and districts manage state reporting and related compliance, special education, finance, human resource, talent, registration, attendance, funding, learning, instruction, behavior, grading, college and career readiness, assessments, and analytics. The company serves state departments of education, public school districts, charter schools, independent schools, virtual schools, and others. PowerSchool Holdings, Inc. was incorporated in 2020 and is headquartered in Folsom, 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.