Shares of Roblox (NYSE: RBLX) went down by more than 5% in morning trading on Thursday after Morgan Stanley analyst Matthew Cost downgraded RBLX stock to Sell from Hold with the lowest price target on the Street of $24. Cost’s price target implies a downside potential of 28.5% suggesting that the stock is overvalued currently.
Cost pointed out that heading into this year, he “had maintained a balanced view on RBLX as we believed that strong holiday seasonality and easy comps through mid ’23 would lead to a series of monthly metric releases showing accelerating bookings growth.”
However, the analyst added that considering RBLX’s strong December metrics, the stock is “now up 28% YTD [year-to-date] and we believe the [first-half of 2023] reacceleration is now fully priced in, with more mixed catalysts ahead.”
Cost is of the view that looking at the second half of the year, the mobile games developer’s growth could decelerate in Q3 and could end the year with a growth rate of just 5%.
Besides Cost, other analysts are cautiously optimistic about RBLX stock with a Moderate Buy consensus rating based on seven Buys, five Holds, and three Sells.
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