Credit Suisse analyst Brad Zelnick downgraded Ping stock on Thursday.
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Ping Identity shares are down sharply after the provider of identity-management and access-control software posted disappointing fourth quarter results.
On Wednesday, Ping (ticker: PING) reported revenue of $63.3 million, down 7% from a year ago, and well below the Wall Street analyst consensus forecast of $68.2 million. Annual recurring revenue was $259.1 million, up 15% from a year earlier. Adjusted profits were 9 cents a share, in line with Wall Street estimates. Under generally accepted accounting principles, the company lost 4 cents a share.
Guidance also fell short of previous Street projections. For the March quarter, Ping sees revenue of $61.5 million to $63.5 million, below the Street’s call for $67.4 million. For the full year, Ping projects revenue of $255 million to $265 million, below the consensus expectation of $291.4 million. The company sees annual recurring revenue of $263 million for the fourth quarter, and $295.5 million to $298.5 million for the full year.
The stock was down 23% to $24.92 on Thursday morning.
Ping is pushing more customers to a software-as-a-service revenue model, and the shift appears to be playing havoc with reported revenues. Wall Street isn’t happy about it.
Credit Suisse analyst Brad Zelnick cut his rating on the stock to Neutral from Outperform on Thursday, setting a price target of $30.
“We entered 2021 identifying Ping as an underappreciated asset that would benefit from a rising tide in security and shift to zero trust architecture,” he said in a research note. “While still believing Ping is a long-term beneficiary of digitization and the shift to zero trust, we move to the sidelines given near-term headwinds and multiple indications of transitions in its business that we believe can take time to unfold.”
Zelnick said the revenue shortfall suggests “volatility and difficulty forecasting the business.” He also said the data point to “deteriorating unit economics,” possibly due to competitive or execution challenges.
Mizuho analyst Gregg Moskowitz repeated his Neutral rating and $30 price target on Ping shares. “Ping once again saw its enterprise customers ‘phase-in’ their large purchases, which resulted in slightly smaller deal sizes and weighed on the net retention rate,” he wrote. “We believe the recent modest COVID-related headwinds to Ping’s business may persist for some time, which in turn could limit fundamental upside.”
Write to Eric J. Savitz at [email protected]
