In a report published today, Pacific Crest downgraded shares of Gigamon Inc. (GIMO) from Outperform to Sector Perform and removed its earlier price target of $38.00

International was an important growth driver last year and was about 20% above North America growth levels. The magnitude of the shortfall in EMEA suggests that efforts to build out the sales force are taking longer than we would have expected, provided that Gigamon is significantly under-indexed in the region relative to more mature data center peers (GIMO at ~22% international mix versus peers above 40%).” Pacific Crest said in a note to clients

“While the forward outlook on gross margins is unclear at this point, the 700 basis points downward gross margin revision for Q1 will certainly be a focal point on the conference call scheduled for April 24. While it is too early to determine the trajectory of gross margins from here, any sustained compression would be a significant overhang on the story and could alter our view of the company’s competitive positioning.”

Shares of Gigamon Inc. (GIMO) closed at $26.20 on Monday.

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