Analyst Explains Why They Downgraded Their Rating on Imperva (IMPV)

By Ryan Adsit

Imperva (NASDAQ: IMPV) received a Hold rating and a $55.75 price target from Evercore ISI analyst Kenneth Talanian yesterday. The company’s shares closed yesterday at $55.11, close to its 52-week high of $57.65.

Talanian noted:

“We believe most strategic acquirers, however, have been less active in the space. Recall that in October 2016, IMPV was forecasted to grow revenue low double digits with just about breakeven non-GAAP profitability. The company finished 2017 with 22% revenue growth and ~11% operating margins. Forecasts for F18 revenue have previously been cut due to a shift to more ratable sales (see our prior earnings note here). The uncertainty around growth (better measured by billings) and profitability caused the more recent decline in the stock, but we believe the fundamentals are in a materially better position than during the October 2016 timeframe. Given the announced acquisition, we are downgrading IMPV from and moving our PT from $56 to $55.75.”

According to TipRanks.com, Talanian is a 5-star analyst with an average return of 16.4% and a 73.4% success rate. Talanian covers the Technology sector, focusing on stocks such as Proofpoint Inc, Symantec Corp, and Check Point.

Currently, the analyst consensus on Imperva is a Hold with an average price target of $52.30, implying a -5.1% downside from current levels. In a report released today, Morgan Stanley also upgraded the stock to Hold.

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The company has a one-year high of $57.65 and a one-year low of $37.17. Currently, Imperva has an average volume of 482.9K.

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Imperva, Inc. engages in development, marketing, sales, service and support of cyber-security solutions that protect business critical data and applications. Its products include web application security, beach prevention, sharepoint, file, cloud, and data security, platform and industry solutions.