UPDATE: Credit Suisse Downgrades Covisint on Negative FQ4 Preannouncement
In a report published Friday, Credit Suisse analyst Michael Nemeroff downgraded the rating on Covisint (NASDAQ: COVS) from Outperform to Neutral, and lowered the price target from $17.00 to $8.00.
In the report, Credit Suisse noted, “COVS negatively preannounced that F4Q14 (Mar) revenue is expected to be down 1-7% yr/yr ($24.0-25.5M), which is well below prior guidance of +6-8% yr/yr ($27.3-27.8M). The weaker FQ4 revenue outlook was attributed to sales execution and late-stage pipeline conversion issues as well as greater than expected decline in legacy EDI subscription revenue. Additionally, board member Sam Inman will now serve as the interim CEO and mgmt expects to hire a new head of sales in the near-term. We lower our F2014 and F2015 revenue / EPS ests to $97.1M / $(0.43) and $100.8M / $(0.47), respectively, from $100.1M / $(0.36) and $114.8M / $(0.17), reflecting a much lower revenue run-rate.”
Covisint closed on Thursday at $7.78.
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