UPDATE: Stifel Downgrades The Advisory Board On Shaky Value Drivers

In a report published Friday, Stifel analyst Shlomo Rosenbaum downgraded the rating on

from Buy to Hold, but reiterated the $65.00 price target. In the report, Stifel noted, “We are lowering our rating on the shares of ABCO from Buy to Hold following F2Q15 (September) earnings results since we believe that each of the value drivers for the stock is currently shaky. Our original thesis had three underpinnings: 1) revenue growth at mid-teens is durable and sustainable long-term, 2) the margin expansion story is evident, leading to strong EPS growth over the long-term, and 3) FCF should accelerate due to the negative working capital model. The spate of acquisitions in the last few years has caused margins to decline and the move to a SaaS model has significantly impacted the FCF characteristics of the business. Revenue disappointment (the second in the last five quarters), coupled with a large free cash outflow in the quarter, leaves our prior thesis with little ground to stand on.” The Advisory Board closed on Thursday at $54.25.