UPDATE: DA Davidson Lowers PT to $7 on Cbeyond; No Growth

DA Davidson cuts its price target from $8 to $7 on Neutral-rated Cbeyond CBEY, as Q1 earnings report showed no sequential growth. DA Davidson says, "CBEY's established markets showed no sequential growth and net customer additions were only 296 compared to Q4's net adds of 1,044 customers. Churn picked up slightly to a 1.5% monthly rate compared to 1.4% in previous quarters. Cloud services grew 23.5% YoY, but only 2.4% sequentially. CBEY is hoping to increase its bandwidth sales on core telco and improve its cloud services growth, but its guidance is only for flat revenues in 2012 of $485-$490 million. Until CBEY can show better growth in cloud services, we think its valuation will remain at the current low level." CBEY closed at $6.69 on Wednesday.