Needham & Company maintained a Buy rating on Virtusa (NASDAQ: VRTU), and cut the price target to $45.00 (from $60.00), following the company's 4Q earnings report. 4Q revenue rose 36% Y/Y and 14% Q/Q to $171.9 million, above above the Street's $171.2 million estimate. VRTU posted $0.55 in EPS, above the consensus of $0.44. VRTU introduced guidance for 1Q with revenue expected to be in the range of $202.5-207.5MM, below consensus of $222.5MM. EPS is expected to fall between $0.14-0.18, well below consensus of $0.48.

Analyst Mayank Tandon commented, "Although VRTU delivered better than expected 4Q results, management introduced guidance for 1Q and FY17 that was below expectations, largely because of softness in the core Virtusa business as customers delayed project starts. These headwinds are expected to abate exiting 1Q, when revenue growth should accelerate and operating margin expansion should resume. While we are lowering our full year estimates to reflect the slow start, we believe there could be upside to our estimates as the large deal pipeline converts and Polaris acquisition synergies come through. With the stock trading at 12x ex-cash our FY18 EPS estimate, we believe the risk-reward is favorable. We maintain our BUY rating but lower our target to $45."

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Shares of Virtusa closed at $32.12 yesterday.