UPDATE: Credit Suisse Resumes Coverage on Covisint Corp. with Underperform Rating, $2.50 PT on Limited Upside

In a report published Monday, Credit Suisse analyst Michael Nemeroff resumed coverage on Covisint Corp. COVS with an Underperform rating, down from Neutral, and a $2.50 price target. In the report, Credit Suisse noted, "We reinstate coverage of COVS with an Underperform rating as we believe the company's ongoing business transition, expectations for near-term total revenue declines, and continued operating losses / cash burn will cause the shares to underperform the company's subscription / SaaS software peers. While we believe the IDAM / PaaS markets represent sizable opportunities and COVS possesses well-regarded technology assets, share appreciation is limited in the near-term, in our view, as the company executes on multiple strategic initiatives supporting its business shift, including: 1) stabilizing subscription revenue (75% of F2015E rev) through new customer acquisition and customer retention, 2) exiting its healthcare application business, 3) deemphasizing its lumpy and unprofitable professional services business (25% of F2015E rev) through third-party service partners, 4) realigning its cost structure for a lower revenue run-rate while continuing to build out a new enterprise sales organization, and 5) continuing to build out its strategic partner relationships (i.e. CSCO)." Covisint Corp. closed on Friday at $2.50.