Slack (NYSE: WORK) stock stood among the laggards of 2019 due to the deep share price selloff in the past six months. The WORK share price lost investor’s confidence amid increasing market competition from Microsoft (NASDAQ: MSFT) and a few other players. Downbeat commentary from market analysts is adding to bearish sentiments.
Slack stock price plummeted more than 40% in the past two quarters. The WORK share price is currently trading around 52-weeks low of $19. Fortunately, some analysts believe Slack shares had already hit the bottom in fiscal 2019; the share price is likely to stabilize in the coming days. In addition, market pundits are predicting that Slack could be acquired this year.
Analysts are Pessimistic About Slack Stock Fundamentals
The market analysts have dropped their price targets for Software Company. This is because of increasing market competition and lower than expected sales growth.
For instance, Baird reduced its price target to $31, saying SaaS multiple contractions could negatively impact the share price. Despite concerns over future growth, its analyst also praised strong Q3 results along with the solid improvements in profitability and cash flows.
Wedbush appears bearish about future trends. The firm declined the price target to $14 with an Underperform rating. Its analyst Dan Ives claims that valuations and growth profile is hinting further downside potential in the coming days.
The Information analyst Kevin McLaughlin predicts Slack to become the M&A target in 2020. The analyst blamed sluggish revenue growth for bearish sentiments.
Revenue Growth is Cooling
Although the company generated 60% year over revenue growth in the latest quarter, it only expects a small sequential revenue increase for the final quarter of 2019. The company anticipated Q4 revenue to stand in the range of 172-174M, up slightly from $168 million in the previous quarter. Moreover, the market analysts are forecasting slower growth for the next year. The company has also been struggling to generate positive earnings and cash flows, which could hinder its investment potential.
