Piper Jaffray Downgrades Rosetta Stone (RST) to Neutral; Lack of Visibility
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Piper Jaffray & Co. downgrades Rosetta Stone (NYSE: RST) from Overweight to Neutral. Price target cut from $27 to $19.
Piper analyst says, "We are downgrading RST shares to Neutral for the following reasons: 1) Rosetta Stone's consumer business, 76% of revenue, is beginning to show signs of slowing more markedly than previously expected, and we lack visibility as to when consumers will be more receptive buyers of the company's language learning products; 2) we believe significant y/y increases in average sales per unit will be hard to come by from current levels, as bundled sales already drive 65% of unit sales; 3) short form advertising, the company's highest performing media, has tightened up, forcing the company to increasingly rely on long form advertising which has relatively lower returns...Given the challenges facing the company's consumer business, we are lowering our FY10E revenue and GAAP EPS estimates from $284M to $278M (+13% y/y) and $1.26 to $1.11 (Street: $1.27)."
To see more analyst ratings on RST Click Here.
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