By Sam Boughedda
JPMorgan downgraded shares of Roblox Corp (NYSE:RBLX) to Neutral from Overweight, cutting its price target on the stock to $35 from $53 in a note to clients on Thursday.
Analysts told investors in a note that their previous view on Roblox was that an improving y/y bookings rate could drive continued outperformance in shares.
However, although "the company did see a better trend over the prior three months, the overall result was below what we had forecast, and more variable than anticipated (October CC adjusted growth of 15% y/y was down from 17-21% in September)," wrote JPMorgan.
The analysts added that yesterday's share price reaction to what they think was a slight miss to investor expectations also leads the firm to believe the bar for growth is "much higher" than they thought.
"We expect bookings to exit the year at a mid-teens growth rate, and extrapolating seasonality forward, forecast similar increases for 2023 (down from our prior high-teens view). While Roblox could see a lift from the rollout of new platform features and an aged-up user base, we also can't entirely discount the possibility that a worsening macro environment will eventually impact spending behavior," the analysts added.
Roblox shares are up 5% Thursday.