Slack Technologies(WORK:NSD) Goldman downgrades on churn rate to Microsoft

STA Research
by: STA Research

Goldman Sach’s analyst Heather Bellini downgraded Slack Technologies today to Sell from Neutral, and maintained her target of $30 on the stock. The basis for the downgrade is the intense competition Slack is facing from Microsoft’s Team platform.  While Bellini believes that  Slack’s messaging service is the best available, the increasing adoption of Microsoft 360 is a risk factor to their subscriber churn.

STA Research(stocktargetadvisor) has a average target of $30 on the stock, and a consensus Buy rating. STA’s  view of the stock is Bearish with a score of 2 out of 10, where 0 is very bearish and 10 very bullish.

What to like:
High market capitalization
This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

What to not like:
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.
Negative cashflow
The company had negative total cash flow in the most recent four quarters.
Low Earnings Growth
This stock has shown below median earnings growth in the previous 5 years compared to its sector
Low Revenue Growth
This stock has shown below median revenue growth in the previous 5 years compared to its sector

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