UPDATE: Benchmark Company Downgrades Guidance Software Following Mixed 2Q Earnings Report

In a report published Friday, Benchmark Company analyst Mark W. Schappel downgraded Guidance Software GUID from Hold to Sell, but reiterated the $7.00 price target.

In the report, Benchmark Company noted, “We are downgrading our rating on GUID from Hold to Sell in the wake of last night's mixed 2Q earnings report and meaningfully lowered outlook for the balance of 2013. Following two consecutive quarterly shortfalls, consensus estimates are sure to come down sharply, analysts will have a difficult time defending the stock and we expect many investors to bail on story for some time. While we are still believers in the longer-term market opportunity (i.e., secular growth drivers in the eDiscovery, cybersecurity and regulatory compliance markets), we believe GUID's continued struggles in sales execution, combined with the absence of a short-term growth catalyst and the lack of dedicated budget line items for its products are likely to weigh on investor sentiment until the company can demonstrate effective sales execution and solid uptake in its core products, which we don't foresee until 2014 at the earliest.”

Guidance Software closed on Thursday at $9.53.