Shares of Slack Technologies (WORK) - Get Report slackened a bit on Friday after the company received an out-of-the-gate underperform rating and a one-year price target more than 30% below its current level from Wedbush Securities as the firm expects Microsoft (MSFT) - Get Report to prove a formidable rival to the instant-messaging and file-sharing platform.
Wedbush analyst Daniel Ives initiated Slack, which went public in mid-June at $26 a share, with a price target of $14.
That's a 31% drop from its current price and less than half the FactSet consensus price target of $31.25. The stock has traded as high as $42, triple Wedbush's target.
"The Slack solution is impressive and represents a strong growth opportunity," Ives said in a research note.
"[However,] we believe penetrating this next phase of enterprises will be incrementally more difficult as the Microsoft/Teams value proposition presents a major competitive hurdle going forward."
Slack, for its part, recently disclosed having more than 12 million daily active users, up about 20% from 10 million at the start of the year and up 50% from 8 million in mid-2018.
The company also reported that among paid customers, users on average spent "about 90 minutes per workday actively using Slack."
Shares of Slack were down 2% at $19.94 on the New York Stock Exchange.
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