Rational (Nasdaq: RATL) bounded ahead 18 percent Thursday, despite getting a downgrade. Most analysts praised its quarterly reports and revised guidance.
Shares were up 7.19 to 46.31 following news that it topped estimates and raised targets despite macro concerns and a potentially slowing IT-spending environment.
Most analysts were bullish, and reiterated stellar ratings.
Goldman Sachs analyst Anne M. Meisner reiterated the stock's place on Goldman's "recommended list," and raised estimates.
The analyst cited strong demand for Rational Suites, comprising over 30 percent of bookings, which continued to drive sales, and praised the company's license revenues of $128.9 million, which showed accelerating growth.
She added that the company's guidance was probably more conservative than it would have been in the absence of a potential slowdown in corporate IT spending.
Prudential Securities analyst John P. McPeake also raised forecasts for the company and reiterated a "strong buy."
He praised the company's operating results, which showed total gross margin at 85 percent, in-line with his firm's forecast.
SG Cowen analyst Rehan Syed went against the grain and downgraded the stock to a "2" from a "1" and said that valuations were still too high.
He also downgraded Tibco Software (Nasdaq: TIBX), which shed 0.75 to 38.88, "on historically high valuations despite strong fundamentals."
Broadvision (Nasdaq: BVSN), Rational, Serena Software (Nasdaq: SRNA) and Vignette (Nasdaq: VIGN) also were downgraded to due to a tighter IT spending environment, the analyst said. While he expects Broadvision and Vignette to report good fourth quarters, he has lower confidence in calendar year 2001 estimates, and believes a seasonally-weak March quarter is in the books before visibility improves.
Rational's third quarter "was very strong but guidance of further licensing revenue acceleration (was) too optimistic," Syed stated.