Boston, MA 11/28/2014 (wallstreetpr) – At some point 21Vianet Group Inc (NASDAQ:VNET) was the darling of analysts who thought it was all going to be a smooth sail for the Internet data center company. However, the Chinese hosting and managed network company doesn’t look as good as it seemed in the past, at least going by the recent analyst reaction on the stock.
Competition, saturation in the market and a general slowdown in the Chinese economy and elsewhere appear to be hurting 21Vianet Group Inc (NASDAQ:VNET). According to a report by Investor’s Business Daily, several analysts have recently moved to alter their rating and target price on the stock of 21Vianet Group. The moves follow a recent financial performance disclosure by the company that didn’t go down well with analysts and investors.
The company’s 3Q financial results revealed revenue pressure across key revenue segments of the business. Because of the revenue pressure and the uncertainties in the market, the company also forecast softly for the current quarter.
Analyst downgrades
Among the rating firms that have altered their previous standing on 21Vianet Group Inc (NASDAQ:VNET) is Canaccord Genuity. The firm lowered the stock to a “Hold” from a “Buy” and also cut its target price to $19 from $35, a whopping drop. Analysts at Stifel Nicolaus also reduced 21Vianet stock to a “Hold” from a “Buy”.
On their part, analysts at Pacific Crest Securities maintained their “Outperform” rating on the stock of 21Vianet Group Inc (NASDAQ:VNET), but cut it to $27 from $30.
Earnings and guidance
For 3Q, 21Vianet Group Inc (NASDAQ:VNET) earned $0.02 per share and generated revenue of $126.8 million. Earnings in the latest quarter improved from a loss of $0.04 per share while revenue edged up 51%. However, analysts on the average expected better figures for revenue and earnings in the quarter.
As for the current quarter, 4Q, the company guided revenue in the range of $132.3-$138.2 million, which should come to 52% gain if the mid-point is achieved. However, analysts have their eyes on revenue of $144 million for the quarter. Although 21Vianet Group Inc (NASDAQ:VNET) did not guide for 4Q EPS, analysts expect EPS of $0.13 for the quarter.
Technicals
Price and volume action was seen in 21Vianet Group Inc (NASDAQ:VNET) in Wednesday’s trading session, most of the action was tilted towards negative side. 21Vianet Group Inc (NASDAQ:VNET) is currently trading below its 20-Day EMA of $19.99 and RSI of 43.57. Going forward the stock needs to consolidate before making any up move.
