JPMorgan downgrades Roblox on more modest sales growth outlook

JPMorgan analyst David Karnovsky downgraded Roblox to Neutral from Overweight with a price target of $35, down from $53, post the Q3 results. Though the company did see a better trend over the prior three months, the overall result was below forecast and more variable than anticipated, Karnovsky tells investors in a research note. While Roblox could see a lift from the rollout of new platform features and an aged-up user base, the possibility that a worsening macro environment will eventually impact spending behavior can’t be ruled out, says the analyst. He expects more modest sales growth and margins in 2023 for the company. Karnovsky moves to the sidelines and looks for better conviction on bookings reacceleration or improving profitability.