Deutsche Bank downgraded Netskope to Hold from Buy, according to analyst Brad Zelnick. The downgrade was confirmed on August 17. No price target accompanied the change in rating.
Zelnick cited expectations of weak near-term performance as the rationale. Netskope, which provides cloud security and data protection software, has seen its stock price decline on the downgrade.
Netskope trades on the NASDAQ under ticker NTSK. The company reported revenue of $570 million in fiscal 2024, up 28 percent year-over-year, according to its latest earnings report. Annual recurring revenue stood at $411 million as of the most recent quarter, with a net retention rate of 131 percent.
Deutsche Bank's downgrade breaks from the consensus rating. Among 28 analysts covering Netskope, 19 rate it Buy, 8 rate it Hold, and 1 rates it Sell, according to consensus data. The average price target sits at $58.85, implying upside from recent trading levels.
The downgrade comes as the software security sector faces macro uncertainty and customer acquisition costs. Other security vendors have faced similar pressure from Wall Street in recent months as spending patterns shift.
Zelnick removed Netskope from Deutsche Bank's accumulate list. Among major research desks covering the name, one fewer now rates it as a buy.
If Netskope does not show improvement in quarterly growth or profitability metrics in its next earnings report, additional analyst downgrades could follow.
