TechWeek: Internet Security Leak

A couple of slaps administered by the sell-side took a bit more steam out of Internet Security Systems(ISSX Quote) this week, and the stock's bullish run has slowed to a walk.

Since the network security provider reported third-quarter earnings in late October, its shares have traded in near tandem with the Nasdaq, gaining just 7%. Compare that with the spring and summer, when its stock jumped 45% between mid-April and mid-September, outperforming the index by a factor of three.

The flattening curve is no mystery. Investors are wondering if most of the good news this company will deliver for a while is already priced in. Jefferies analyst Katherine Egbert, for example, downgraded the stock to hold this week, saying, "We think that current consensus for another year of 14% top-line growth in 2006 reflects an unrealistic level of optimism." ...