BroadSoft's stock slid Tuesday as the telecommunications software company's third-quarter results and fourth-quarter outlook missed analysts' estimates.
THE SPARK: BroadSoft Inc. reported a third-quarter adjusted profit of 29 cents per share, a penny below Wall Street's estimate. Revenue rose 7 percent to $42.9 million. But that was below analysts' estimate of $45.2 million, according to FactSet.
For the fourth quarter, BroadSoft expects adjusted earnings of 34 cents to 49 cents per share on revenue of $47 million to $53 million. Wall Street had estimated profit of 51 cents per share on revenue of $54.8 million.
THE ANALYSIS: Jefferies' George Notter lowered BroadSoft's price target to $38 from $39.75. He kept a "Buy" rating on the shares, saying in a client note that while BroadSoft's business is more volatile than he previously thought, he's still optimistic about its long-term growth prospects.
But Pacific Crest Securities analyst Brent Bracelin cut BroadSoft's stock to "Sector Perform" from "Outperform," citing a sharp decline in billings.
SHARE ACTION: The Gaithersburg, Md., company's stock fell $7.54, or 23 percent, to $25.60 in afternoon trading. The stock has ranged from $20.45 to $39.35 in the past 12 months.