Out of the Gate: Blackboard Declines

Blackboard's stock set a 52-week low of $30.16 earlier in the session. Shares recently gave up $3.66, or 10.7 percent, to $30.55.

Blackboard on Tuesday issued a first-quarter and full-year profit outlook below Wall Street expectations. Separately, Blackboard posted a fourth-quarter profit that soared on strong growth in licensing and hosting sales.

Baird analyst Amy Junker lowered her price target to $38 from $41 and said investors haven't been looking at the software services industry favorably recently.

Also, Junker said there is no near-term catalyst to drive the stock higher, while there's still uncertainty from its purchase of NTI Group Inc.

"We believe it will take a couple quarters for investors to get comfortable with the acquisition of NTI Group," wrote Junker, who has a "Neutral" rating on the stock.

Long-term, however, Junker said Blackboard has excellent growth prospects in the U.S. higher education market, K-12 and international markets.