By Liz Moyer
Roblox Corp (NYSE:RBLX) shares fell 10% Tuesday after Atlantic Equities analyst Kunaal Malde cut the rating to Neutral from Overweight.
Malde cut the price target in half, to $30.
The analyst said there were concerns about app download trends and pointed out the growth in the number of users has stalled. Hours played in the U.S. and Canada showed slower growth than international markets, and the number of users aged 9 to 12 in the U.S., which used to make up 10% of users in early 2020, is now closer to 5% of users.
“Management believes there is room for engagement growth even among its core young US demographic, but recent app download trends look to be weakening and additional softness in the US could further impact the shares in the near-term,” Malde wrote.
Malde said Roblox is trying to appeal to 9 to 12-year-olds to bring their user numbers back to pandemic-era peaks.
Roblox shares are down nearly 74% this year.