NEW YORK (TheStreet) -- Liquidity Services, Inc. (LQDT) shares were downgraded to "neutral" from "outperform" by Baird on Thursday. The firm lowered the company's price target to $19 from $30.
The company's stock is down 12.5% to $18.26 in early trading Thursday.
The downgrade follows yesterday's news that the auction marketplace company had withdrawn from bidding for the Department of Defense's rolling stock surplus contract. Liquidity Services withdrew after it determined that the bidding price had reached economically unsustainable levels.
"Based on an unfavorable result yesterday from the Rolling Stock auction, along with the impact from Tuesday's Non-Rolling Stock bid, we are lowering our rating to Neutral from Outperform as long-term revenue and margin assumptions need to be reset meaningfully lower." Baird said in its note.
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TheStreet Ratings team rates LIQUIDITY SERVICES INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate LIQUIDITY SERVICES INC (LQDT) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself."