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Technology Stocks : Acacia Communications

ACIA 114.99

0.0%

Mar 1 3:00 PM EDT

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From: FJB	3/27/2019 4:01:31 PM
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Acacia Stock Falls On Downgrade Over Concerns About Optical \| Investor's Business Daily Investor's Business Daily www.investors.com Acacia stock tumbled Wednesday as a Wall Street analyst downgraded the optical communications company over concerns about customer concentration and valuation. Morgan Stanley analyst Meta Marshall downgraded Acacia Communications ( ACIA) to underweight from equal weight. However, Marshall raised the price target on Acacia to 44 from 38, saying he is early with the downgrade and believes the company could "post meaningful beats" in the next six to nine months. "We think ultimately investors are over-extrapolating earnings power," and not assigning enough risk to the fact that its revenue comes from a relatively small number of customers and this customer concentration is, "something we expect to be a bigger risk entering 2020," Marshall wrote in a note to clients. Acacia stock was down 3.3%, near 54.25, during morning trading on the stock market today. Shares Jump In Past YearThe company has been a member of the IBD Leaderboard list of top performing stocks, though it could be removed today following the stock drop. Acacia stock is up 36% in the past 12 months. The maker of optical communications devices is in a battle with Ciena ( CIEN) over next-generation products. The industry is busy working on the 5G new generation of communications networks. Acacia reported fourth-quarter earnings on Feb. 21 that beat Wall Street estimates. It did not provide a full-year, 2019 outlook. Follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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