Piper Jaffray Downgrades LeapFrog (LF) to Neutral; Concerns Resurface

Piper Jaffray downgraded LeapFrog (NYSE: LF) from Overweight to Neutral with a price target of $5.50 (from $8.50) following weak Q2 results and outlook.

Analyst Stephanie Wissink comments, "Our thesis continues to break down, resulting in limited confidence in any base point in shares. As such, we are downgrading to Neutral. While we may be downgrading at the bottom of the trading range, there is little to ground a more opportunistic
view. Fundamentals continue to erode, sales slippage is now raising questions around business structure, and little action around diversity of revenue has us concerned that competition will trump LeapFrog in winning the content battle. Brand recognition and equity remains very high among millennial consumers, and cash balances continue to expand, making LF a reasonable take-out target; but that alone does not justify an ownership bias."

The firm cut FY 2015 EPS from $0.00 to ($0.25) and FY 2016 EPS from $0.34 to $0.00.

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

Shares of LeapFrog closed at $5.43 yesterday.

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