Why Are Sumo Logic Shares Trading Lower Today?

Piper Sandler analyst Rob Owens downgraded Sumo Logic Inc SUMO from Overweight to Neutral and lowered the price target from $24 to $20, implying fully priced at the current level.
Owens reduced forward expectations for core Sumo revenue for the second time in the past three quarters despite a revenue beat, saying extended North America sales cycles and pressured net retention rates are "weighing on results."
Owens would like to see improved execution and overall growth rates before getting more constructive on the shares.
BTIG analyst Gray Powell downgraded Sumo Logic to Neutral from Buy.
Some underlying trends were concerning as revenue upside in the full-year outlook was driven entirely by improved trends at Sumo's largest customer, Powell noted.
Powell added that the revenue ex-largest customer was downwardly revised due to long sales cycles in North America, which is "hard to overlook."
The software company reported Q2 revenue of $58.8 million, up 19% year-on-year, beating the consensus of $56.7 million. The adjusted EPS loss of $(0.11) exceeded the consensus loss of $(0.14).
Sumo Logic sees Q3 revenue of $60.3 million - $61.3 million, above the consensus of $60.1 million. The Q3 adjusted EPS loss guidance of $(0.14) beats the consensus loss of $(0.15).
Price Action: SUMO shares traded lower by 12.52% at $17.60 in the premarket session on the last check Friday.