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Roblox (NYSE: RBLX) possesses slipped 9.7% alongside a rough open for the broader market as Atlantic Equities shifts to Neutral, indicating an easing in engagement trends.

The company takes the right approach to focus more on monetization, according to analyst Kunaal Malde, and booking trends should improve with easier comparisons from here.

But download trends are weakening, indicating a “slowdown” in engagement in major markets in the near term, Malde adds.

“Investors are concerned that all of Roblox’s engagement growth will now come from low ARPU (average revenue per user) international markets, while usage in North America has stagnated,” Malde said. “Management believes there is room for growth in engagement even among its youthful core demographic in the United States,” but “Even the faster growing, less mature international markets such as Japan are showing broadly stable trends compared to other apps, rather than demonstrating positive momentum.”

There are particular monetization enablers in search and discovery, advertising, and the user-generated content catalog. But recent moves haven’t unfolded as quickly as expected and payer growth has stalled, suggesting that the shift to low ARPU markets isn’t the only headwind to monetization.

Free cash flow was 17% of bookings in the first quarter, better than expected, but likely benefited from the timing of working capital – and an unsurprising single-digit reduction in conversion rates could weigh on Roblox stock (RBLX) in this market, Malde says.

A downgrade might not seem timely given some already lackluster performance — and year-over-year booking growth likely “tipped” in March, Malde says. But many pandemic beneficiaries are also going through similar difficult transitions, and Roblox’s valuation (adjusted for growth) looks worse than its peers based on gross profit and free cash flow yield.

Atlantic reduced its price target to $30 from $60, down from $27.44 currently.

Industry-wide, video game sales fell year-over-year for the sixth straight month in April.