Barclays analyst Mario Lu kicked off coverage of the video game developer Roblox Corporation. RBLX with an Underweight rating and a $20 price target.

The thesis: Users joined the Roblox platform to socialize with friends digitally. The San Mateo, California-based company was among the main beneficiaries of the Covid-19 pandemic, with a core demographic made up of users between the ages of 5 and 24.

It is “what we consider to be the only true metaverse today despite the looming threats of Meta’s Horizon Worlds and Manticore Games’ Core,” Lu wrote.

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Roblox users in regions with high ARPU (average revenue per user), such as the US and Europe, “already have 30% penetration.” That means “both user and booking growth may be challenged in the future”…