JP Morgan Downgrades S1 Corp. Rating

Analyst Adam Hold says he's surprised and disappointed by the magnitude of the Internet software company's earnings estimate revision

JP Morgan downgraded S1 Corp. (SONE ) to long term buy from buy.

Analyst Adam Hold says lowered guidance is attributed to longer sales cycles, more deliberate decision making, a transition to a new product set and a generally stagnant economy. He says despite several positives in the quarter, he's surprised and disappointed by the magnitude of the earnings estimate revision. Hold cut his $0.57 2002 EBITDA-to-share estimate to $0.45, and trimmed the $0.80 2003 estimate to $0.61. He also cut the $22 target to $11 -- 40 times the new $0.27 2003 EBITA-to-share estimate. Although Hold still believes in a turnaround, given the uncertainty surrounding the near term, he downgraded.

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