Omniture dips, analyst initiates 'Neutral' rating

Omniture Inc. shares dipped Tuesday and a Susquehanna Financial analyst began covering the stock with a "Neutral" rating, predicting an increase in investments that could impact its ability to beat growth projections.

The Web analytics company's shares declined 36 cents to $21.22 in midday trading.

In a client note, Susquehanna analyst Marianne Wolk said Omniture is working to expand its offerings before Google Inc. and other ad networks increase their free analytics products, pressure the company's SiteCatalyst product's pricing and hone in on mid-range customers.

Wolk expects Omniture's growth in the next few years to include increasing sales of its business optimization platform, and expects this to be accompanied by rising investments in areas like technology, training and professional services.

This could "dampen its ability to demonstrate significant upside to projected gains in profitability and free cash flows," she said.

"Given the uncertain economic backdrop, we prefer to stay on the sidelines until there is greater evidence Omniture can deliver on its product transition strategy and exceed expectations, despite these challenges," she said.