UPDATE: Goldman Sachs Maintains Demandware at Buy Post Neckermann Contract Termination

Goldman Sachs reiterated its Buy rating and $34 price target on Demandware

following insolvency proceedings of a major client. Goldman Sachs noted, "After the close, Demandware announced that it is terminating its Master Subscription agreement with Neckermann on September 30, 2012. … Neckermann accounted for 10% of Demandware's revenue in 2Q12. Assuming that 10% was constant, we calculate that Neckermann would have accounted for approximately $2mn per quarter in revenues from until the contract with Neckermann expired in 2Q13. In our research report on August 3, 2012, Pullback is an opportunity in E-Commerce leader, upgrade to Buy, we reduced our contribution from Neckermann by $1mn per quarter in both 1Q13 and 2Q13. Because of today's announcement, we are lowering our 1Q13 and 2Q13 estimates by $1mn each." Demandware closed at $32.04 on Thursday.