E2open Faces Organic Growth Challenges, Debt Overhang: Goldman Sachs Downgrades Stock
Goldman Sachs analyst Adam Hotchkiss downgraded E2open Parent Holdings (NYSE:ETWO) from Neutral to Sell and lowered the price target from $3.5 to $2.9. The stock fell.
Despite year-to-date stock underperformance, Hotchkiss noted that the lack of visibility into an organic growth turnaround, execution risk as the company works to refine its organic sales engine further, and the company’s floating-rate leverage overhang will likely weigh on E2open Parent shares over the next 12 months.
As a business that has historically relied on acquired assets to support growth, E2open Parent’s elevated leverage in a high-interest rate environment is limiting the company’s ability to pay down debt to meet its leverage targets.
This cycle further limits the company’s ability to invest in growth initiatives (including acquisitions).
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In addition, with the company roughly doubling in size through acquired assets over the last 4 years, the amount of new …
Full story available on Benzinga.com