Dougherty & Co Downgrades Merge Healthcare (MRGE) to Neutral; Weakening Fundamentals

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Dougherty & Co downgraded Merge Healthcare (NASDAQ: MRGE) from Buy to Neutral with a price target of $3.25 (from $5.00).

Analyst, Deepak Chaulagai, said, "We believe the move to the subscription based revenue model is not gaining traction as previously anticipated, lowering the associated sustainability and the predictability of the revenue stream. The company announced that it has retained Allen & Company, a NY based investment bank, to explore and evaluate strategic alternatives. We think it is difficult to predict the probability of a sale or the multiple that would be paid for the business because of the lack of growth and visibility."

For an analyst ratings summary and ratings history on Merge Healthcare click here. For more ratings news on Merge Healthcare click here.

Shares of Merge Healthcare closed at $3.54 yesterday, with a 52 week range of $2.20-$7.23.

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