Investing.com -- Piper Sandler has downgraded Roblox shares to Neutral and cut the price target to $50 from $100 in a note on Tuesday, citing weak first-quarter guidance and mounting uncertainty around the gaming platform's age-verification rollout.

Analyst Thomas Champion said the magnitude of the company's fiscal year 2026 bookings guidance cut, reduced to 8%-12% growth from a prior range of 22%-26%, reflected a troubling lack of visibility just weeks after it was issued.

"The magnitude of the FY26 bookings guidance cut (just ~85 days after issuing it) reflects a level of uncertainty in the business," Champion wrote.

At the heart of the downgrade is what Piper Sandler described as underappreciated second-order effects from Roblox's age-verification implementation.

The firm said management acknowledged that "age-gating chat access reduced platform vitality, driving an unexpected and meaningful headwind to top-of-funnel sign-ups." Daily active users came in 8% below Piper Sandler's estimates in the first quarter.

Champion stated that the firm is moving to the sidelines until the company can demonstrate a sustained recovery.

"A few quarters will likely be needed to demonstrate sustained improvement, a path back to 20%+ bookings growth, and to rebuild credibility with investors," he wrote.

Piper Sandler acknowledged Roblox has several growth initiatives underway, including a subscription effort and an expansion targeting users over 18, but said these are difficult to evaluate with age-verification headwinds still an unresolved variable.

On valuation, Champion noted Roblox is now trading at approximately 15 times EV/forward EBITDA, which Piper Sandler said "should help insulate the stock from downward pressure."