NetSuite Takes a Nosedive

SAN FRANCISCO -- Although on-demand software supplier NetSuite(N Quote) posted posted good results Thursday, shares tumbled Friday after the company outlined plans to limit earnings growth.

The stock plunged $3.45, or 15.5%, to $18.86 in recent trading. The 12-month consensus target price was listed at $24.50 by Thomson Financial. On Thursday, it had been $27.

After achieving profitability in coming quarters, NetSuite plans to hold bottom-line growth to 2% a year, reinvesting any "overachievement" into the business, CFO James McGeever said on the company's conference call late Thursday. He acknowledged that analyst forecasts have assumed higher bottom-line growth. "Our current plan to reinvest in growing the business would not make that likely," McGeever said.

Accordingly, some analysts lowered one-year price targets Friday. ...