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Critical Path, Inc. (Nasdaq: CPTH) fell 3 9/16 to 21 7/16 Tuesday after Banc of America Securities downgraded the stock to buy from strong buy, saying they were taking a "slightly more cautious outlook on valuation and visibility."
"Several factors, when taken together, lead us to adopt a less bullish stand on the shares in the near term," the Banc of America analysts wrote. The firm also reduced its 12-month price target for Critical Path shares to 42 from 85.
The news was not all bad, however. "We still look for very strong fourth quarter results, and would not be surprised to see as much as 10 percent revenue upside, consistent with the company's results in previous quarters this year," Banc of America said.
Critical Path, a San Francisco, California-based provider of business-to-business Internet messaging services, posted a loss before charges of US$8.7 million, or 14 cents per share, compared with a loss of $6.2 million, or 17 cents, in the same period a year earlier.
Revenue, at $45 million, was 815 percent ahead of the year-earlier quarter.
The company expects fourth-quarter revenue to be between $54 million and $56 million, with pro forma earnings of a penny per share. For 2001, Critical Path projects $300 million to $310 million in revenue, and pro forma earnings of 39 to 41 cents per share.
"We anticipate continued high demand for our product and service offerings," chief executive officer Doug Hickey said in announcing the projections earlier this month.
Company shares have fallen sharply in recent months, and are well below
their 52-week high of 119 1/2.
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