Needham & Company downgraded Ceragon Networks (NASDAQ: CRNT) from Strong Buy to Buy with a price target of $4.00 (from $8.00). The change follows weak Q3 results and lower guidance. Analyst Alex Henderson was expecting better numbers from the company.

"This is not at all what we were expecting from Ceragon. After a number of major contract win announcement’s and lots of indications of strong order growth, with B-B running at 1.25-1.35 over the last three quarters, Ceragon has decided it can no longer accept the low margin business and long payment terms it has been getting out of India and some other geographies. As a result, they are shifting to a more price conscious selling strategy and pushing to improve margins," said Henderson.

"We must admit to being substantially blind-sided by the size of the rest of Ceragon’s numbers. The pressure is clearly from the geographic mix but it also stems from the slower than expected ramp of sales into major US and Canadian Tier 1 Service Providers that are sliding from 1H to 2H CY15 for the initial sales ramp," he added.

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Shares of Ceragon Networks closed at $2.04 yesterday.