Stock Watch: S1 Falls on Analyst Downgrades

S1 Corp. (Nasdaq: SONE) fell 2 5/8 to 15 1/2 Wednesday after a series of analyst downgrades followed the e-commerce software company’s second-quarter earnings report, which contained a warning about future results.

Analysts at ABN Amro, Legg Mason Wood Walker, US Bancorp Piper Jaffray and Raymond James Financial cut their ratings on the stock, according to reports. A day earlier, Goldman Sachs and ING Barings were said to have issued downgrades.

At Robertson Stephens, analyst Scott Appleby said he continues to rate the stock as a buy because “the shares appear to have bottomed.” However, he said that “the future outlook on revenues and margins has become clouded.”

Appleby added that his firm’s “enthusiasm for S1 in the short term has waned.”

After the close of trading Tuesday, the Atlanta, Georgia-based S1 said second-quarter revenue rose 277 percent from a year earlier to $59.1 million, and the loss before items totaled $14.6 million, or 27 cents per share. The net loss, though, widened to $153 million, or $2.82 per share, from $2.2 million, or 8 cents per share.

The company also warned that “pricing pressures” could hurt revenue and gross margins in future quarters. Competition in the U.S. held results back in the quarter, S1 said. Gross margin edged up to 44 percent from 43 percent a year earlier.

S1 makes e-commerce software for the financial industry.

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