UPDATE: Bank of America Downgrades Digital River to Underperform, Lowers PT Following Q1 Revenue/EPS

In a report published Friday, Bank of America analyst Nat Schindler downgraded the rating on Digital River DRIV from Buy to Underperform, and lowered the price target from $16.00 to $13.00. In the report, Schindler noted, “Digital River reported Q1 revenue/non-GAAP EPS of $113.7mn/$0.33, well above Street at $102.8mn/$0.20. Strong Q1 results were due to better than expected non-recurring product launches from key customers. We downgrading to Digital River to Underperform from Buy as the newly announced 4-6 quarter investment cycle will likely: 1) drain the company's enviable cash position; 2) limit acquisition speculation surrounding a recent private equity investor; and 3) is unlikely to reignite growth against increasing secular headwinds . We are lowering our price objective to $13 (from $16) based on 13x our 2014 non-GAAP EPS plus $7.82/cash per share.” Digital River closed on Thursday at $14.41.