Wedding-site operator Knot falls on downgrade

William Blair analyst Meggan Friedman downgraded the stock to "Market Perform" from "Outperform" and lowered third-quarter estimates "to reflect slower growth in national advertising and a decline in publishing."

She analyst now expects sales of $24.9 million for the quarter, down from $27.1 million. Analysts polled by Thomson Reuters are predicting, on average, revenue of $27 million.

Friedman said cancellations of national advertising programs over the coming quarters, as well as vendors' shift away from higher-priced "feature listings" on the company's sites, will likely pressure shares beyond the end of the year.

"We see risk to online sponsorship and advertising in the coming quarters, with near-term growth in national accounts in particular looking less likely," she wrote in a note to investors.

While she reduced estimates and thinks the stock is not likely to outperform the market over the short term, Friedman did note "that traffic remains robust and that the company's sites appear to be extending their share lead on their competitors."

Shares of the New York-based company fell 19 cents, or 3.1 percent, to close at $5.86. A year ago, shares traded as high as $19.32. The company's Web sites include TheKnot.com, TheNest.com and WeddingChannel.com among others.