What happened
Shares of Switch, Inc. (SWCH) fell 10.8% last month, according to data provided by S&P Global Market Intelligence, after an analyst at Cowen issued an underperform rating for the data center infrastructure company.
So what
Switch is tapping into the growing cloud computing market by renting out its cloud infrastructure to Amazon.com, News Corp., Intuit, eBay, and more than 800 other companies. That's good news because cloud computing will be worth an estimated $411 billion by 2020. But the bad news for Switch investors is that the company's stock price has been volatile since its IPO in October of last year.
Image source: Getty Images.
More of that same volatility was evident in January when Cowen analyst Colby Synesael initiated coverage of Switch but set the price target at $15 and with an underperform rating. Synesael's price target is around where the shares are trading right now, but about 12% down from where the shares were trading when the target was issued.
The stock took a nose dive in the middle of the month as investors were clearly unhappy with the news.
Now what
Since Synesael's investor note, the stock hasn't recovered and has continued to slip this month, with shares down about 6% since the beginning of February (as of this writing). The company reports its fourth-quarter and full-year 2017 results next month, with revenue estimated to be $376 million at the midpoint for the full year. Investors need some more positive news as shares have plummeted 25% since the company went public late last year.
