Imperial Capital Downgrades Datawatch Corp (DWCH) to In-Line

Imperial Capital downgraded Datawatch Corp (NASDAQ: DWCH) from Outperform to In-Line with a price target of $10.00 (from $18.00).

Analyst Michael Kim commented, "Our price target is approximately 9% above recent levels. DWCH’s transition into visual data discovery has proven more challenging than expected, as reflected by disappointing F4Q14 results. Revenue performance has been inconsistent, with lengthening sales cycles and lower pipeline conversion in the quarter. Contribution from strategic partners also declined and we believe the company has a longer road to ramp this channel toward its target mix."

He added, "We anticipate the company’s new sales leadership will build a stronger pipeline and drive improved conversion over the coming quarters, though material revenue inflection may not occur until later in FY15. We continue to believe DWCH could benefit from secular growth opportunities in visual data discovery, consistent with larger vendors. At current levels, we see limited downside to the stock, given the company’s substantial cash and moderate cash outflow, but we think investors could remain on the sidelines until management delivers more consistent execution and provides greater visibility."

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

Shares of Datawatch Corp closed at $9.16 yesterday.

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