ArcSight (ARST) shares are trading sharply lower this morning after Needham analyst Scott Zeller cut his rating on the security software company to Hold from Buy. He notes that ARST is due to report April quarter results on June 10th.
Zeller writes that he finds a number of factors which could slow growth, in particular increased competition and “scalability/sales infrastructure/partnership challenges.”
The analyst adds in a research note that the company remains the “mind share leader” in the SIEM – security information and event management – sector, but that “pressure in the field is changing its profile from ‘secular grower’ who can power through seasonality and make upwards revisions to guidance, to ‘solid grower’ with high-teens revenue growth and 20-25% EPS growth, with fewer upward revisions.”
ARST is down $3.02, or 14.5%, to $17.78.
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