Morgan Stanley Cuts MobileIron Price Target, Sees Lower Strategic Value

The brokerage slashed its target price to $2.75 from $7 as it has "less conviction on MOBL's strategic value as the market for stand-alone mobile security platforms continues to slow."

Lead analyst James Faucette feels that mobile is not an "excessively vulnerable threat vector," as today's networks have built-in traffic encryption, apart from pervasive device-level encryption.

"Outside of heavily regulated industries, dual sources of embedded system security seems to have limited market appetite for third party mobile security platforms, which results in less potential strategic value than we had previously assigned to the company," Faucette wrote in a note.

Related Link: Wunderlich Assumes MobileIron At Hold

Further, the increased traction of bundling activity of larger enterprise software vendors such as VMware, Inc. VMW and Microsoft Corporation MSFT could hurt independent enterprise mobile management vendors like MobileIron.

"VMW's Airwatch and MSFT's EMS/Intune are gaining momentum upselling (or at least bundling) their respective install bases, which we view particularly troubling for independent EMM providers attempting to gain share in much of the dollar opportunities in the enterprise," Faucette highlighted.

As such, it would be tough for MobileIron to gain share and deliver growth in future. Faucette has an Equal Weight rating on the stock.

Shares of MobileIron closed Friday's regular trading session at $2.70 and were flat on the day at time of publication Monday.

Full ratings data available on Benzinga Pro.