02:32 PM EDT, 05/09/2024 (MT Newswires) -- Roblox ( RBLX ) shares may extend a slump in the weeks ahead after the company cut 2024 bookings guidance, even as management focuses on "driving profitable growth rather than growing bookings" to hit targets, Wedbush said Thursday in a note.

The company slashed bookings guidance to $4 billion to $4.1 billion from $4.14 billion to $4.28 billion, while reporting a Q1 loss Thursday of $0.43 per diluted share, compared with the loss of $0.44 a year earlier.

Management's aggressive initial projections in September didn't align with actual growth, causing investor skepticism, Wedbush said.

Investors also are assuming the "worst" due to the lack of significant advertising revenue, the report said.

"We could not disagree more with this assumption, and firmly believe that advertising can deliver as much as $1 per monthly

active user per month," Wedbush said.

Wedbush said its outperform rating on the company's stock and price target of $56 are under review following the change in guidance.

Robolox shares tumbled 22% in recent Thursday trading.

Price: 30.61, Change: -8.41, Percent Change: -21.56