Cowen Downgrades LogMeIn, Cites 150% Rally Since June '13

LogMeIn Inc LOGM shares have appreciated about 150 percent since June 2013, and Cowen’s Gregg Moskowitz believes the risk-reward on the stock is no longer favorable given the current stock valuation and the decelerating organic growth.

Moskowitz downgraded the rating on the company from Outperform to Market Perform, with a price target of $63.

Stock Appreciation

The analyst attributed the share price appreciation to the excellent job done by LogMeIn in broadening its product portfolio and monetizing its installed base.

“We credit CEO Bill Wagner with much of this improvement. Further, join.me remains a disruptive force in the web collaboration market and should continue to grow strongly for LOGM,” Moskowitz mentioned.

Related Link: Benzinga's Top Downgrades

Organic Growth

However, organic bookings have underperformed expectations over the last two quarters. Although the analyst expects LogMeIn to see additional booking benefit from the price hike in 2Q, organic constant currency growth is expected to decline to the low double digits for the remaining quarters of 2016.

“Meanwhile, and on a positive note, while many of the bears have focused on the 1Q16 decline in gross renewal rates, we believe this was solely driven by the price hike and highly doubt that renewal rates will degrade any further over the remainder of 2016,” Moskowitz added.

At time of writing, LogMeIn shares were trading down 1.89 percent at $61.92.

Posted In: Analyst ColorLong IdeasNewsDowngradesAnalyst RatingsMoversTechTrading IdeasCowenGregg Moskowitz
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