Shares of Irvine’s Epicor Software Corp. slumped Thursday after an analyst downgraded the stock on weaker prospects for the company’s business selling software to retailers, manufacturers and small businesses.
Epicor’s stock closed down more than 9% on a recent market value of $467 million.
Longbow Research LLC analyst Steve Koenig cut his rating to “neutral” from “buy.”
“Although we continue to believe Epicor is relatively well positioned with its new Epicor 9 product cycle, the hoped-for recovery in the enterprise resource planning market looks more muted in Epicor’s small business market than we expected,” Koenig said in a research note.
He also said the company could see some fallout from the debt crisis in Europe, according to a report on financial news website Barrons.com.
Koenig said his checks find “softness” in what’s called maintenance revenues, which Epicor gets from license renewals and ongoing support services. They are expected to come in flat to down a bit from a year ago.
Epicor makes what’s known as “enterprise resource planning” software, which helps businesses track back-office tasks, customers and data to make better use of their capital.
For the third quarter, Wall Street analysts are expecting Epicor to report profits of $8 million, which would be up 14% from the year-ago quarter, on sales of $105 million, up about 5% from a year earlier.
