The firm cut the price target $26 from $31 while maintaining its neutral rating after holding talks with the company's vice president of investor relations, Jesse Hulsing.
D.A. Davidson noted that that the company was in the early stages of adoption by various companies that lie outside of its core vertical customer base.
Despite the headwinds and lowered price target, D.A. Davidson is still positive on Slack's future growth, but the firm also sees the company as being fairly valued at its current level.
Slack was trading down 3.5% on Wednesday to $24.80.