UPDATE: Benchmark Company Upgrades Guidance Software on More Balanced Risk/Reward Profile

In a report published Tuesday, Benchmark Company analyst Mark W. Schappel upgraded the rating on Guidance Software (NASDAQ: GUID) from Sell to Hold, and reiterated the $9.00 price target.

In the report, Benchmark Company noted, “Though we are concerned with a number of issues currently facing the company — including declining profitability,persistent sales mishaps and the lack of dedicated budget line items for many of its products — given the decline in the stock since our downgrade, we believe the risk/reward profile is now balanced and see little downside risk in the shares. The stock declined 14% to around $8.20/share following our August 2 downgrade but began recovering recently to the current level of $8.60, representing an EV/Revenue multiple of 1.8x applied to our 2014 revenue estimate. The stock could trade down to $8.20 again, representing 4% downside from the current price where the shares seem to have found support, most likely for potential takeout reasons.”

Guidance Software closed on Monday at $8.55.