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D.A. Davidson Downgrades Barracuda Networks As Shares Surpass Price Target

D.A. Davidson Downgrades Barracuda Networks As Shares Surpass Price Target - Barracuda Networks NASDAQ:CUDA, Amazon.com, Inc. NASDAQ:AMZN

D.A. Davidson downgraded Barracuda Networks Inc CUDA 5.21% to Underperform from Neutral with a 12-month price target of $19.50 (up from $17), given the 42 percent upside in shares since reporting first quarter earnings.

The brokerage said the company's organic growth rate is clearly slowing. For the first quarter, year-over-year growth was just 11 percent, including inorganic growth contributed by the Intronis acquisition versus last year's sequential revenue growth of 8 percent, with revenue up 18 percent year-over-year.

The slower growth was attributed to the company's loss of market share to public cloud providers such as Amazon.com, Inc. AMZN 0.13%, Alphabet Inc's GOOGL 0.18% Google, and Microsoft Corporation MSFT 0.51%.

"We see no indication that this headwind will abate," analyst Mark Kelleher wrote in a note.

Though Barracuda's cloud-based solutions are ramping quickly, the analyst said the transition will likely create a headwind to overall growth for some time.

Shares of Barracuda Networks closed Thursday at $22.08.

DateFirmActionFromTo
Aug 2016DA DavidsonDowngradesNeutralUnderperform
Jul 2016Summit Redstone PartnersInitiates Coverage onHold
Jun 2016JMP SecuritiesDowngradesMarket PerformMarket Underperform

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