Robbie Stephens Cuts Quest to 'Market Perform'

Analyst Michael Beckwith thinks the software company will be burdened by uncertainity in the information technology sector and near-term growth risk

Robertson Stephens downgraded Quest Software (QSFT ) to market perform from buy.

Analyst Michael Beckwith says he had $68 million revenue estimates and $0.07 cash EPS estimates. He notes the company cited overly aggressive Q3 guidance, the impact of an increasingly challenging economy and residual fallout from the Sept. 11. events. While he believes Quest will emerge as one of the dominant performance management companies over the longer term, he thinks the stock will be burdened by continued information technology uncertainty, the greater risk to near-term growth and a premium valuation in the near term. He cut the $0.28 2001 EPS estimate to $0.18, and trimmed the $0.47 2002 estimate to $0.32.

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