UPDATE: Credit Suisse Downgrades Performant Financial as Litany of Issues Cloud Outlook
In a report published Friday, Credit Suisse analyst Anjaneya Singh downgraded the rating on Performant Financial (NASDAQ: PFMT) from Outperform to Neutral, and lowered the price target from $13.00 to $8.00.
In the report, Credit Suisse noted, “We are downgrading our rating on PFMT shares to Neutral (from Outperform) and reducing our target price to $8 (from $13), following a series of delays and disruptions impacting the company. As a result of these issues, the visibility becomes significantly lower for PFMT's FY14 outlook, and potentially beyond. While the company's business model remains sound, and the addressable market opportunity is quite large, we believe the unpredictable nature of their Student Lending and Healthcare segments (due to mostly to regulation and contract transition) offsets the value proposition. We would need to see more predictable and smoother contract transitions as well as higher revenue visibility to become constructive on PFMT.”
Performant Financial closed on Thursday at $7.23.
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