Roblox (RBLX) stock is falling today on news that the online gaming platform is adding new parental controls. One month ago, short selling firm Hindenburg Research published a short report accusing Roblox of favoring user growth over child safety. While the company denies these allegations, Roblox has still opted to add more parental controls and gatekeeping features. This will likely limit its users, as Roblox is highly popular with children. Now parents have more ways to limit their child’s time using Roblox’s programs.
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What’s Happening with Roblox Stock Today?
Shares of Roblox are down today amid some early trading volatility. As of this writing, RBLX is down 1% for the day and isn’t showing signs of a rebound. This continues the losing streak that the stock has been on for the past week, gradually trending downward and falling 7%. Now this parental controls update stands to push shares down even more, as it could limit the platform’s user activity.
While the company maintains that it planned to implement these new tools prior to the Hindenburg short report, it is still moving forward with launching the new parental controls and gatekeeping features today. The Wall Street Journal reports that these new features include allowing parents to “set daily usage limits” and “block access to specific game genres” among other things.
As a company that primarily caters to children and teenagers, Roblox is potentially setting itself up for lower user growth in the coming quarter. Hindenburg also alleged that the gaming company has inflated user metrics for investors. If either allegation is true, implementing parental controls could address both accusations, though it would also likely compromise share prices.
Wall Street Remains Fairly Bullish on RBLX Stock
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RBLX stock based on 16 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 33% rally in its share price over the past year, the average RBLX price target of $56.50 per share implies 12% upside potential.
See more RBLX stock analyst price targets
Sentiment toward Roblox from Wall Street may be trending downward, though. TD Cowen analyst Doug Creutz recently maintained a Sell rating and a bearish $35 price target, implying a 31% downside potential.
