Wedbush Cuts Price Target on Progress Software (PRGS) Following 3Q15 Results

Wedbush maintained a Neutral rating on Progress Software (NASDAQ: PRGS), and cut the price target to $25.00 (from $29.00), following the company's 3Q15 earnings results. PRGS missed slightly on the top line ($101M vs. 104M) and lowered FY15 revenue guidance by three points to 3-4% in organic, constant-currency terms.

Analyst Steve Koenig commented, "Management chalked up the miss to weaker-than expected results from minor contributors such as Corticon (rules engine) and Brazil. Strategically, we think a bigger problem is signs of a slow start to the company’s December acquisition of Telerik, a vendor of modern development tools and web content management/ digital marketing solutions. The company announced the departure of the head of its Application Development Tools unit (primarily composed of Telerik), due to a reorganization that integrates the new business with core product, marketing, and sales operations under newly appointed COO Jerry Rulli, formerly head of the OpenEdge business unit. We think it’s possible that Telerik experienced a sales slump following its acquisition, not unusual in the software world. Although Telerik bookings have improved in 3Q due to sales of its Sitefinity CMS and Telerik mobile platform, we think it’s too early to tell whether or not this acquisition will become PRGS’s hoped-for growth driver."

For an analyst ratings summary and ratings history on Progress Software click here. For more ratings news on Progress Software click here.

Shares of Progress Software closed at $25.63 yesterday.

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