Concur shares sink after analyst downgrade
NEW YORK (AP) — Shares of Concur Technologies Inc. sank Thursday, after a Piper Jaffray analyst lowered his rating on the company.
The downgrade came a day after the company said profits in the coming year would likely fall short of what Wall Street expected.
THE SPARK: Analyst Mark Murphy dropped Concur to "underweight" from "neutral." He said the stock price looks expensive measured against the company's cash flow and is vulnerable to a big drop. It's gained 21 percent so far this year.
Murphy also noted that the company now expects lower revenue for two quarters in a row.
THE BIG PICTURE: Concur, based in Redmond, Wash., sells human-resources software to companies. Employees use Concur's system to book business trips and to file travel bills and other expenses.
When reporting quarterly earnings Wednesday, Concur said it expects revenue in the next fiscal year to rise about 25 percent over 2012. Adjusted pre-tax income should be at least $1.40 per share, the company said. Both are below what analysts expected.
THE ANALYSIS: Murphy said Concur remains "an industry leader," but he is concerned about a slowdown in corporate travel, the lower revenue outlook and competition from Workday and others offering similar services. American Express corporate travel sales have dipped 9 percent over the past year. "The travel data, as we interpret it, could potentially be consistent with the emergence of a recessionary economic climate," Murphy said.
He lowered his price target for Concur shares to $49 from $60.
THE SHARES: Concur fell $3.27, or 5 percent, to $61.69 in afternoon trading. The stock has traded between $42.76 and $76.15 over the past 52 weeks.