Shares of CalAmp Corp. plunged 10.2% on Friday after J.P. Morgan downgraded the stock to Sell from Hold and maintained a price target of $11 (13.5% upside potential).
J.P. Morgan analyst Paul Coster cut the stock’s rating to “reflect the ongoing uncertainty regarding the firm’s long-term growth prospects.”
“In our view, the risks are quite elevated at present, the stock is close to fair-value, and we are sidelined,” Coster commented. The analyst added that “we are not calling for investors to short this stock, but we do expect CAMP (CAMP) to underperform the mean of our coverage over the next 6-12 months.”
On Dec. 17, CalAmp , a telematics systems and software provider reported better-than-expected 3Q results. Its 3Q earnings of $0.07 per share came ahead of the Street’s estimates of $0.02. Revenue of $88 million beat analysts’ expectations of about $83 million.
The company’s CEO Jeff Gardner said, “Our results reflect another quarter of revenue growth from continued strong demand for our global SaaS solutions.” He added, “As we navigate the challenges related to the global pandemic, there are a number of growth trends driving opportunities across our business including the 3G-to-4G transition underway in the U.S. as well as the increasing need for fleet management solutions, especially for municipalities and school districts where we offer leading software solutions.” (See CAMP stock analysis on TipRanks)
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 5 Buys and 2 Sells. The average price target stands at $11.26 and implies upside potential of about 16.2% to current levels. Shares were up by 1.2% year-to-date.
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