Deutsche Bank Downgrades SolarWinds (SWI) to Hold
Deutsche Bank downgraded SolarWinds (NYSE: SWI) from Buy to Hold with a price target of $45.00 (from $60.00). The change follows disappointing Q2 results. Analyst Karl Keirstead noted limited visibility.
"SWI reported a 2Q15 miss, with total revs of $119m (+17% y/y, +23% c/c) missing expectations of $123m, license revenues of $39m ( +3% y/y , +5% yc/c) well below Street estimates of $44m and lowering its 2015 revs guidance, offset by good performance in terms of operating margins (43% vs. Street at 40%), EPS ($0.52, beating guide of $0.45-$0.47) and the 2015 EPS guide (mid-point of $2.04, in-line with our $2.03 estimate despite the revs guide-down). This is the second weak qtr in a row and we have too little visibility into the cause of the miss and the recovery path to retain our BUY rating. We’re trimming our rating to a HOLD and lowering our PT to $45 from $60," said Keirstead.
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Shares of SolarWinds closed at $47.05 yesterday.