Roblox (RBLX) came under heavy selling pressure Monday after Jefferies downgraded the stock from Hold to Underperform and set a $38 price target. The firm believes the stock’s recent rally reflected overly optimistic expectations for bookings growth and warned that improving user growth and monetization in the U.S. and Canada could take longer—and cost more—than investors expect. Jefferies also lowered its bookings and EBITDA forecasts, pointing to continued spending on developers, infrastructure and other initiatives as a potential drag on margin expansion.

The downgrade comes as Roblox continues to face legal and safety-related pressure surrounding protections for younger users, including litigation alleging inadequate safeguards against predators and inappropriate content. The chart has turned decidedly bearish, with RBLX dropping below its 8-, 21- and 55-day exponential moving averages. The -DI has moved above the +DI while ADX is above 28, showing strengthening downside momentum. RSI near 42 leaves room for additional weakness before reaching oversold territory, while the PPO has crossed below its signal line. With shares already falling sharply, traders may want to watch for continued confirmation or a weak rebound rather than chase the initial decline.

Wishing you the best,

Wendy

Looking for side hustle income In Just a few minutes a day? Click here to see how other traders are doing it.