Markets & Finance

Goldman Cuts Rating On FreeMarkets

FreeMarkets Inc. (FMKT) was downgraded by Goldman Sachs to market perform from market outperform after the business-to-business software maker posted a third quarter loss per share of S$0.04 on a 53% rise in revenue.

Goldman analyst Thomas Berquist said that although FreeMarkets reported solid results, economic conditions have caused further slowdown in new customer acquisitions.

Berquist is maintaining his 2002 earnings per share estimate of $0.15 and $200 million revenue estimate, but is cutting his rating on the stock as he doesn't expect customer acquisition growth to improve over next few quarters. He says the company has done very good job of expense management to get to profitability. However, the revenue growth picture is much cloudier. Given the slower growth and high valuation multiple, he believes the stock is poised for a pullback.

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