Cloud-based software company LogMeIn fell more than 24 percent during late-morning trading due to weak outlook for the third quarter.
The Boston-based company reported earnings per share of $1.32 versus Wall Street expectations of $1.25, according to FactSet.
However, it lowered its revenue expectations for the fiscal year by 2 percent. LogMeIn now expects its yearly revenue to fall between $1.185 billion and $1.195 billion, down from its April projection of $1.208 billion to $1.223 billion.
J.P. Morgan downgraded the stock to “Neutral” from “Overweight” on Thursday, pointing to troubling signs in LogMeIn’s collaboration sector, which makes up a majority of the overall business. The biggest concern, the investment bank said, is increased competition in collaboration software squeezing renewal rates.
LogMeIn has acquired collaboration rivals in recent years like GoTo and Jive. “But near-term execution issues including competition and possible pricing pressure will likely keep a lid on the stock and that is why we rate shares of LOGM Neutral,” J.P. Morgan analyst Sterling Auty said in a note.
Originally published at CNBC