FBN Securities downgraded its rating on Riverbed Technology Inc. (NASDAQ:RVBD) to "Sector Perform" from "Outperform" following first quarter forecast from the provider of information technology services.
Shebly Seyrafi, an analyst at FBN, trimmed his price target on the stock to $28 from $31.
For the first quarter, RVBD guided revenue of $183 million -187 million, lower than consensus of $197.1 million and EPS of $0.19-$0.21, lower than consensus of $0.25.
The company expects disruptions due to its transition to next-generation Steelhead appliances (more power and software capabilities) and due to its introduction of Granite (block-level accelerator useful for remote storage), Seyrafi noted.
Seyrafi said RVBD’s guidance for F2012 revenue growth of 17%-20% creates a rather high-bar for second and third quarters, all which need to grow nearly 10% Q/Q in revenue for the annual guidance to be achieved.
"Even with an expected pull-back in RVBD’s share price to perhaps $26 today, there is less than 10% upside to our new $28PT," he wrote.
On Friday, shares of the San Francisco, California-based company tumbled 20.6 percent to $23.75 in early trade. The stock has been trading between $18.33 and $44.70 over the past year.
