What's happening: Shares of Polycom (NASDAQ:PLCM) were down 9.6% as of 11:15 a.m. Monday after William Blair analyst Jason Ader downgraded the stock from "market perform" to "underperform." 

Why it's happening: Ader explained that following field-level discussions with value added resellers, he now believes Polycom's business is facing pressure from a number of sources in the current quarter, including extended weak video demand and sales execution, Polycom's recent channel partner program overhaul, and increasing competition. Ader also expressed longer-term concerns for Polycom's relationship with Microsoft, as the tech giant launched its own videoconferencing solution earlier this year dubbed Microsoft Surface Hub.

It's hard not to lend credence to Ader's downgrade considering several of his concerns were evident challenges in Polycom's most recent quarter. While Polycom managed to grow earnings 28% year over year thanks to cost cutting, for example, revenue growth remained sluggish at just 1%. What's more, CEO Peter Leav admitted his company likely lost market share in North America as businesses like Cisco bolstered their efforts to compete in the space. At the same time, Polycom stock now trades at a mouthwatering 11.5 times next year's estimated earnings. With the caveat that that multiple could change significantly if Polycom does, indeed, have a difficult upcoming quarter to report, I think the stock might well reward patient investors if the company can find a way to resume profitable top-line growth in this difficult market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.