According to Morgan Stanley, it’s time to exit Roblox after its strong December report. Analyst Matthew Kost downgraded the gaming company’s shares from Equal Weight to Reduce, saying the upside is limited from here after the stock’s recent outperformance. Shares of Roblox closed 11% higher on Tuesday after a December 2022 metrics report showed estimated bookings came in between $430 million and $439 million for the month, or up 17% to 20% year over year. The gaming company calls its revenue figure bookings. Kost wrote Thursday, “Entering ’23, we maintained a balanced outlook on RBLX as we believed a strong holiday season through the middle of ’23 and a series of easy comp monthly metric releases will lead to.” “However, after much stronger than expected December results, RBLX is now up 28% YTD and we believe the 1H:23 re-acceleration is now fully priced in, with more mixed catalysts ahead,” Cost added. . Shares of Roblox may have a rough start to 2023, but last year they posted a 2022 drop of about 72%. The analyst cut his price target from $27.50 to $24, which means shares could lose 32% from Wednesday’s closing price. What’s more, the analyst has a $10 price target on his bear case. Shares fell more than 6% in premarket trading Thursday. The analyst expects slow growth to begin in the second half of 2023. While Roblox expects immersive advertising to be a key growth driver in 2023, the analyst expects the rollout to be too slow to support the stock. “We believe 1H booking re-acceleration is priced in going forward with more mixed catalysts, as we expect slower growth in 2H and minimal growth from advertising in the near term,” Cost wrote. —Michael Bloom of CNBC contributed to this report.