Zacks Investment Research downgraded shares of Vocus Inc. (VOCS) from NEUTRAL to UNDERPERFORM on June 21, 2013, with a target price of $9.25.
Vocus' first quarter adjusted loss per share of $0.06 was wider than the Zacks Consensus Estimate. However, the company generated solid year-on-year revenue growth. The company benefited from the high revenue generation ability of its new marketing suite. The company has also successfully capitalized on strategic acquisitions. By leveraging iContact's capabilities and increasing the sales team, Vocus is eyeing the cloud-space opportunities in the SMBs. But the continuous decline in demand for its legacy PR solution and lesser focus on selling low-end solutions to small businesses could prove to be a bottleneck. Apart from this, margin contraction and currency fluctuations are concerns. We therefore downgrade the stock from Neutral to Underperform.
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