UPDATE: Bank of America Downgrades Carbonite on Valuation

In a report published Wednesday, Bank of America analyst Jaimin Soni downgraded Carbonite CARB from Buy to Neutral, but raised the price target from $14.00 to $15.00.

In the report, Bank of America noted, “After the stock run up of roughly 35% following last qtr's earnings, we are downgrading CARB to Neutral from Buy as we see limited near term catalysts to drive the stock significantly higher from current levels. Our PO goes to $15 (from $14) and implies ~3x CY13e EV/Rev multiple which is a discount to our SaaS comp group trading at ~5x, as CARB's revenue base is much smaller but growing in-line with the average. CARB is seeing a slow but steady mix shift to small-medium business customers from individual consumers which can be positive longer term, but the path to get there may be choppy as – 1) revenue growth rate is expected to decelerate to high teens exiting this year with focus moving away from consumers; 2) increasing reliance on indirect channel (>3,700 resellers) can help sales, but may weigh on margins given discounting; 3) renewal rates for SMB customers from indirect channel may be lower than from direct; 4) and while its early, recently launched backup appliance may also weigh on gross margins.”

Carbonite closed on Tuesday at $13.40.