Needham & Company Downgrades Financial Engines (FNGN) to Hold

Needham & Company downgraded Financial Engines (NASDAQ: FNGN) from Buy to Hold following Q3 results which showed decelerating growth and declining margins in FY15.

Analyst Mayank Tandon commented, "We are downgrading FNGN to a HOLD to reflect a sharp deceleration in revenue growth and a projected decline in margins over FY15 as management accelerates investments in “newer” retirement planning services to reignite top-line growth. While we believe investing in the “newer” growth channels is the correct strategy as growth in the "core" 401K segment slows, investors are not likely to see a payoff before FY16. We expect the stock to remain range-bound pending a rebound in revenue growth and margin trends, and we would move to the sidelines. We were disappointed to learn that long-time CEO Jeff Maggioncalda is stepping down at year-end, but we are not concerned with the transition since he is passing on the reins to current President Larry Raffone, who has been with the company for 14 years."

For an analyst ratings summary and ratings history on Financial Engines click here. For more ratings news on Financial Engines click here.

Shares of Financial Engines closed at $40.82 yesterday.

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