ChannelAdvisor's 7 Downgrades After Trimming Revenue Estimates

ChannelAdvisor Corp (NYSE: ECOM) closed down more than 53 percent on Tuesday, after the company trimmed its revenue estimate for the fourth quarter, falling substantially short of expectations.

CEO Scot Wingo explained that the shortfall was caused by the change in the company’s business mix. As the company shifts to bigger clients, volume discount expectations increase, putting pressure on the top line. However, Wall Street does not seem convinced, as seven major research firms downgraded the stock.

Below is a closer look at these changes:

• Pacific Crest: Downgraded the stock from Outperform to Sector Perform and removed its $29 price target.
• Stifel Nicolaus: Demoted the equity from Buy to Hold, eliminating the $30 price target.
• Janney Capital: Changed its recommendation from Buy to Neutral, setting a $16 price target.
• Baird: Shifted its rating from Outperform to Neutral, and accompanied it with an $18 price target.
• Deutsche Bank: Modified its grade from Buy to Hold, fixing a $16 price target.
• Goldman Sachs: Downgraded Channel Advisor from Neutral to Sell ($14).
• Raymond James: Altered its score from Outperform to Market Perform.

Related Link: Benzinga's Top Downgrades

Shares closed at $9.83, the lowest price since the company went public.

Jim Cramer

Jim Cramer also weighed in on ChannelAdvisor on CNBC's “Stop Trading” segment.

“The big guys kind of figured out they don’t need our [the company’s] advice,” Cramer said.

“What do they figure now? Give their money to Google,” he added.

He concluded stating, “ECOM’s loss is Google’s gain.”