LogMeIn downgraded at J.P. Morgan after outlook disappoints
Shares of LogMeIn Inc. are down 22% in premarket trading after the company delivered a disappointing third-quarter forecast. J.P. Morgan analyst Sterling Auty downgraded the stock to neutral from overweight following the earnings report. "The issues in the collaboration segment of the business, the largest portion of revenue at 57%, are causing management to lower the full-year outlook and likely will place the stock in the penalty box as changes will take a couple of quarters to get worked out," he wrote. "LogMeIn's valuation on a cash flow basis appears to be a sizable discount, but investors will likely question the ability to deliver the results in the near-term keeping a lid on shares, especially given management commentary about competition and prices." Auty also discussed competitive pressures, which he said will remain a concern for investors until the company sees improvement in its collaboration business. LogMeIn makes tools that facilitate remote connectivity. Shares were down 6.3% over the past 12 months, as of Thursday's close, while the S&P 500 had gained 15%.
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