Sam Boughedda

Investing.com — Roblox Corp’s (NYSE:) price target was cut to $27 from $32 by Morgan Stanley analyst Brian Nowak on Friday.

According to the analyst who gave the stock an Equal Weight rating, they were cautious about revenue growth for the second half and 2023.

Additionally, margins could be affected by larger investments in developer payouts.

“Given management’s comments around continued investment into the developer community (i.e. “This is not an area that we will have short-term operational leverage in, so we expect DevEx remain elevated moving forward,” stated Nowak.

Analysts expect “significant pressure on near-term profitability” due to “this higher level investment combined with reduced bookings expectations leads us reduce our 23 EBITDA estimate of 25%.”

Roblox stock traded at 4% more on Friday. It is still down nearly 70% for 2022.