UPDATE: Credit Suisse Downgrades Ping Identity Holding Corp. (PING) to Neutral
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Credit Suisse analyst Brad Zelnick downgraded Ping Identity Holding Corp. (NYSE: PING) from Outperform to Neutral with a price target of $30.00 (from $34.00).
The analyst comments "We note several near-term headwinds for the business, including: (1) Duration/Cloud Mix Volatility – revenue miss contradicts management messaging a return to longer duration deals in December, suggesting volatility and difficulty forecasting the business; (2) The announced departure of SVP Field Ops, Dave Packer, creates transition risk with a successor yet to be identified; (3) Deteriorating Unit Economics – net new business growth (ARR) was -17% in 2020 and we model +7% in 2021E, yet operating expenses are guided +15% y/y vs +9% last year. The cost of incremental ARR is increasing and quite possibly a sign of competitive and/or execution challenges; (4) Shifting Business Model – mix of cloud (now >15% of ARR) surprised to the upside in the quarter and will continue to be a revenue headwind ($30mn expected for FY21). However, Ping’s cloud offerings are largely additive, not substitutive, and thus raises concerns about the ability to forecast the business; (5) Customer Acquisition – while we acknowledge COVID impact, FY20A net new logos -37% y/y is a disappointing indicator; and (6) Billings DSO at 85 days vs. 77 last qtr and 76 last year, suggests an especially backend loaded quarter, perhaps further elevating execution risk."
Shares of Ping Identity Holding Corp. closed at $32.41 yesterday.
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