Pacific Crest Downgrades Bazaarvoice, Calls Quarterly Results 'Mildly Disappointing'

In a report published Thursday, Pacific Crest analyst Brendan Barnicle downgraded the rating on

to Sector Perform, following the company's "mildly disappointing" FQ4 results and the reduced profitability guidance for FY2016. For FQ4, Bazaarvoice posted its revenue and adjusted EBITDA marginally below expectations, although the EPS was better than anticipated and operating cash flow, while being below expectations, turned positive for the first time. "Management noted that it faces continued headwinds in F2016 with new product introductions, sales execution and dollar based churn. While churn is expected to improve in F2H16 and Bazaarvoice expects its new products to take share, these changes set up the company for better results in F2017 than in F2016," Barnicle reported. Also, despite ASPs stabilizing and bookings beating the management's expectations in FQ4, the analyst believes financial uncertainty still exists, leading to why FY2016 estimates have been lowered. The company has lowered its EBITDA guidance for FY2016, while maintaining its revenue expectations for the year. "While we do not see major downside risk to BV at current levels, we do see few near term catalysts," Barnicle added.