D.A. Davidson Downgrades Barracuda Networks As Shares Surpass Price Target
D.A. Davidson downgraded Barracuda Networks Inc (NYSE: CUDA) to Underperform from Neutral with a 12-month price target of $19.50 (up from $17), given the 42 percent upside in shares since reporting first quarter earnings.
The brokerage said the company's organic growth rate is clearly slowing. For the first quarter, year-over-year growth was just 11 percent, including inorganic growth contributed by the Intronis acquisition versus last year's sequential revenue growth of 8 percent, with revenue up 18 percent year-over-year.
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The slower growth was attributed to the company's loss of market share to public cloud providers such as Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc's (NASDAQ: GOOGL) Google, and Microsoft Corporation (NASDAQ: MSFT).
"We see no indication that this headwind will abate," analyst Mark Kelleher wrote in a note.
Though Barracuda's cloud-based solutions are ramping quickly, the analyst said the transition will likely create a headwind to overall growth for some time.
Shares of Barracuda Networks closed Thursday at $22.08.
Latest Ratings for CUDA
Aug 2016 | DA Davidson | Downgrades | Neutral | Underperform |
Jul 2016 | Summit Redstone Partners | Initiates Coverage on | Hold | |
Jun 2016 | JMP Securities | Downgrades | Market Perform | Market Underperform |
View More Analyst Ratings for CUDA
View the Latest Analyst Ratings
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