Roblox (NYSE:RBLX) has a promising long-term focus on delivering impact in interactive experiences – but it faces some risks to growth and ability to monetize audiences, Oppenheimer says in initiating coverage of the stock at a neutral Perform rating.

The company has “proven success taking share” in the $180B videogame market, drawing from diversifying revenues in subscription and advertising, analyst Martin Yang said.

The company is also investing in high-impact technology, and “its value proposition to users is so unique and compelling that Roblox will continue to engage them at massive scale” – to the tune of 60M-plus daily active users as of December, Yang said.

Roblox differentiates itself with vertical integration of its key components – which means for example that “The Roblox Platform is known for its performance on lower-end smartphones and ease of access at global scale,” and many R&D efforts are still in very early stages of delivering potential.

But it will see an impact to growth in user engagement and bookings in the coming 2-3 years thanks to a “structurally lower” payout to developers vs. its competitors, he added.

Developers on the Roblox platform make less than 25 cents on each dollar generated, vs. 70-85 cents on more mainstream platforms, Yang said.

It’s currently prioritizing investments over profitability, which is keeping margins down in the near term. And it has potential to accelerate its revenue growth and expand margin but “we are not yet convinced on the timing and magnitude.”

In the near term, Yang expects bookings growth to slow down. Morgan Stanley downgraded the stock a week ago due to similar concerns over bookings growth.