Virtusa Lowered to “Neutral” at JPMorgan Chase (VRTU)

Virtusa (NASDAQ: VRTU) was downgraded by analysts at JPMorgan Chase from an “overweight” rating to a “neutral” rating in a research report issued to clients and investors on Monday, reports.

The analysts wrote, “We are downgrading VRTU from Overweight to Neutral as we think the 46% stock rally this year (vs. S&P 500 up 9%) already prices in much of the earnings growth upside we expect in FY14 (initial guidance to be issued in early May). Moreover, unlike in the previous years, the company’s large clients may not be a significant driver of its overall growth next year, potentially triggering growth slowdown in FY14. However, VRTU’s growing pipeline and margin expansion potential should still result in solid earnings growth this year (we est. 30%), keeping us at Neutral.”

Virtusa (NASDAQ: VRTU) traded down 3.42% on Monday, hitting $23.15. Virtusa has a 1-year low of $11.23 and a 1-year high of $24.63. The stock’s 50-day moving average is currently $21.81. The company has a market cap of $602.0 million and a price-to-earnings ratio of 24.21.

Virtusa (NASDAQ: VRTU) last issued its quarterly earnings data on Wednesday, January 30th. The company reported $0.29 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.28 by $0.01. The company had revenue of $86.50 million for the quarter, compared to the consensus estimate of $85.59 million. During the same quarter last year, the company posted $0.22 earnings per share. Virtusa’s revenue was up 19.8% compared to the same quarter last year. Virtusa has set its Q4 guidance at $0.30-0.32 EPS and its FY13 guidance at $1.05-1.07 EPS. Analysts expect that Virtusa will post $1.07 EPS for the current fiscal year.

A number of other analysts have also recently weighed in on VRTU. Analysts at Noble Financial downgraded shares of Virtusa from a “buy” rating to a “hold” rating in a research note to investors on Friday. Analysts at Zacks downgraded shares of Virtusa from an “outperform” rating to a “neutral” rating in a research note to investors on Wednesday, January 2nd. They now have a $19.50 price target on the stock.

Three investment analysts have rated the stock with a hold rating and two have given a buy rating to the company’s stock. The stock presently has an average rating of “Hold” and a consensus price target of $21.25.

Virtusa Corporation (NASDAQ: VRTU) is a global information technology services company. Virtusa uses an offshore delivery model to provide a range of information technology (IT) services, including IT consulting, technology implementation and application outsourcing.

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