January 31, 2013
Velti downgraded to Hold from Buy at Craig-Hallum
Craig-Hallum downgraded Veltl given near-term EBITDA pressures following management commentary. Price target lowered to $4 from $12.
Velti downgraded to Market Perform from Outperform at Wells Fargo
Wells Fargo downgraded Velti on concern 2013 will be a transition year for the company as management works through execution issues. The firm lowered its price target range for shares to $4.50-$6 from $10-$12.
These guys are just making stuff up. How did they calculate a price target of $4 from a general comment that EBITDA will be down. There was no indication of down by how much, no actual guidance or numbers mentioned that I was aware of.
First of all, in fairness, the street has given very little credence to those clueless analysts' previous lofty price targets, hence VELT has been trading a fraction of $10+ PT for a very long time.
Secondly, the only jusitificaiton for going long on VELT has always been its good rev growth. Now that CFO has declared not only would there be no growth in 2013, there would actually by rev redeuction, totally demolishing the only pillar supporting VELT. Hence a drastic downward of PT is entirely justified in this case.