Proofpoint, Inc. (PFPT) Shares Slip, Investors Watching Closely, Here is Why

Proofpoint, Inc. (NASDAQ: PFPT) shares fell in early trading yesterday lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, U.S. stocks opened significantly lower in early trading. The Dow Jones Industrial Average was 58 points lower, or 0.29% to 19895, the S&P 500 fell 7 points, or 0.28% to 2268, while the Nasdaq dropped 22 points, or 0.38% to 5542.

Shares of Proofpoint, Inc. (NASDAQ: PFPT) were downgraded by analysts at Zacks Investment Research in a note to their investors today. With a rating of Sell on the stock, the company has a 52-week high of $88.00. As a means of comparison, a number of other analysts have issued reports on the company in recent days, and Proofpoint, Inc. has earned a consensus one-year price target of $88.04, higher than the opening price of $80.26, a difference of 11.16 percent. Downgrades occur when analysts feel that the future prospects for the security have diminished from the original recommendation, usually due to an important and fundamental digression in the company’s actions, future vision or industry.

Shares of Proofpoint, Inc. (NASDAQ: PFPT) opened at $80.26 yesterday trading between $78.89 and $80.26, and last traded at $78.89, which represents a decrease of $1.53 from the previous closing price.

Proofpoint, Inc. (NASDAQ: PFPT) currently has a market cap of 3.35B.

Proofpoint, Inc. (NASDAQ: PFPT) Average Daily Trading Volume

55,243 shares crossed the trading desk yesterday, 16 percent lower than the average, out of a total float 41,332,000. lower than normal. Look for trading volume to pick up in the coming days as investors often use upticks in trading volume to identify heavy volume accumulation or distribution by institutional investors.

However, a single day of heavy buy side trading is not enough to assert a trend. As such, market traders will continue to watch for institutional sponsorship as a signal that financial institutions are moving forward.

Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These professional investors retain teams of analysts that research thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

Proofpoint, Inc. (NASDAQ: PFPT) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By spotting trends, moving averages allow traders to make those trends work in their favor and increase the number of successful trades.

With that in mind, Proofpoint, Inc. (NASDAQ: PFPT) now has a 50-day MA of $74.96 and 200-day MA of $73.80. It has traded in a 52-week range between $35.56 – 88.00 and today’s last price is 10.35%% lower than the 52 week high of $88.00.

Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors look for companies that have increased their earnings by at least 25% over 3 consecutive years.

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