Goldman Sachs downgrades Twilio, other software names on 'limited catalyst' path
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Twilio (NYSE:TWLO), Bentley Systems (NASDAQ:BSY), RingCentral (NYSE:RNG) and TechTarget (NASDAQ:TTGT) fell approximately 2% or more in pre-market trading on Thursday as Goldman Sachs downgraded the quartet of software companies, citing a "limited catalyst path" for the stocks after they reported first-quarter results. 
Analyst Kash Rangan lowered his ratings on Twilio (TWLO), Bentley Systems (BSY) and RingCentral (RNG) to neutral from buy and cut TechTarget (TTGT) to sell from neutral.
Twilio: For Twilio (TWLO), Rangan said the firm is "cautious" on the near-term trajectory of revenue growth due to its usage-based model and slowing growth in Data and Applications after it showed a slowdown in the first quarter.
Bentley Systems: For Bentley Systems (BSY), Rangan said the downgrade stemmed from a "limited catalyst path for the shares amid China volatility and potential for more pronounced Commercial sector weakness, coupled with a demanding valuation."
On Tuesday, Bentley (BSY) reported first-quarter results that topped expectations.
RingCentral: Rangan downgraded RingCentral (RNG) due to the fact the firm is "becoming incrementally more cautious" on how durable its double-digit revenue growth can be in the face of continued competition from Microsoft (MSFT) and Zoom (ZM).
RingCentral (RNG) reported first-quarter results that topped estimates on Tuesday, in addition to raising its fiscal 2023 guidance.
TechTarget: TechTarget (TTGT) was downgraded by Rangan on worries that there will be "continued pressure in enterprise IT to weigh on the top-line." Additionally, since the company has non-subscription based revenue, it has more limited visibility than other software companies.
Analysts are largely bullish on Twilio (TWLO). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates TWLO a HOLD.
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