UPDATE: Feltl & Company Downgrades ServiceSource to Hold

Feltl & Company lowers its rating on ServiceSource SREV to Hold from Buy on valuation as it raises its price target to $17 from $16 a share as derived from its DCF model. Feltl & Company comments, "Our downgrade is primarily based on valuation as we struggle with ServiceSource's long-term margin profile and overall model profitability. Our DCF model fairly values ServiceSource at $17 per share using top-line growth assumptions that we believe are already aggressive (21% CAGR over 8 years) with long-term gross margins of 54% and a more normalized 12% discount rate. We would be more constructive on buying the stock around $14 per share." SREV closed at $17.71 a share on Monday.