Deutsche Bank Downgrades ServiceSource International (SREV) to Hold, Execution Challenges

November 6, 2012 9:16 AM EST
Get Alerts SREV Hot Sheet
Price: $1.55 +3.33%

Rating Summary:
    7 Buy, 4 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 17 | Down: 11 | New: 18
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Deutsche Bank downgraded ServiceSource International (NASDAQ: SREV) from Buy to Hold with a price target of $7.00 (from $15.00) following Q3 results and weak outlook.

The firm comments, "SREV reported rev/EPS of $59.1m (18% y/y)/$0.02 vs. our $58.5m/$0.02 and consensus $58.8m/($0.01). 4Q12 guidance was below consensus, which reflects reduced customer engagements/loss of a customer, and longer rev conversion cycles for new ACVs. The Co’s tone understandably seemed resigned to poor execution, with 2012 ACV growth target of 15% - 17%, vs guidance at start of year of 35%. Looking ahead, we see significant challenges – the nascent nature of subscription business indicates investors will deem this service-heavy in near term, and young salesforce indicates future execution will be challenging."

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

Shares of ServiceSource International closed at $8.20 yesterday.


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