SecureWorks stock sinks after J.P. Morgan abandons bullish view
Shares of SecureWorks Inc. sank 4.2% toward a seven-month low in morning trade Thursday, after J.P. Morgan abandoned its bullish stance on the cybersecurity company for the first time, citing concerns over lingering sales transition and productivity issues. Analyst Sterling Auty downgraded the stock to neutral, after being at overweight since he started covering it in May 2016, a month after the IPO. He lowered his stock price target to $12, which was below the $14 IPO price for the first time, from $15. Although the company beat fiscal third-quarter loss-per-share and sales expectations, the company provided a downbeat outlook for the current quarter, which Auty said might reflect caution following the departure of Chief Revenue Officer Jason Capitel in October. Auty said the company is still the "best positioned" of the managed security service providers (MSSPs), but "changes in sales leadership has the potential to undo some of the work down and cause disruption near term." The stock, which has closed below its IPO price since Sept. 6, 2016, has tumbled 21.5% the past three months while the S&P 500 has gained 6.9%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.