(CNN) - Slack may be ubiquitous in offices throughout Corporate America, but the company is facing a formidable challenge from a much larger rival. That has Wall Street analysts increasingly nervous about Slack's future.
Microsoft, which is worth more than $1 trillion compared to Slack's market value of $10 billion, is hoping to unseat Slack with its Teams collaborative workplace app. Microsoft is offering a free version of the tool and is also bundling Teams into its Office 365 Business Premium and Office 365 E3 cloud-based subscription offerings.
The Microsoft threat is a big reason why Slack's stock, which debuted in late June through a direct listing on the New York Stock Exchange, has plunged in the past few months. It's a classic David vs. Goliath story -- except that most investors don't believe Slack has a big enough rock to slay the giant from Redmond, Washington.
Slack shares fell 2% Friday and dipped below $20, hitting an all-time low that is 25% below the stock's reference price of $24 on the day of its Wall Street debut. The stock has plummeted more than 50% from its peak of $42, which it reached on its first day of trading.
The company reported a big loss and slowing sales growth in September, news that spooked investors.
Will Slack ever be profitable?
And while losses are expected to narrow, analysts are not forecasting a profit for slack next year. Or in 2021 or 2022, for that matter. Consensus estimates for 2023 are not yet available.
Two analysts issued bearish reports on Slack this week, adding to the downward pressure on the stock. Both specifically mentioned Microsoft as the reason they were skittish.
"We have observed strong fundamental progress of Microsoft Teams over the past 12 months," said Mizuho analyst Gregg Moskowitz in a report.
He added that "there was a heavy focus on Teams" at Microsoft's Ignite conference for developers earlier this week, and noted that "customer interest levels in Microsoft Teams were very high."
So even though Slack's stock has plunged in the past few months, Moskowitz said that he was lowering his target price to $20 from $24 because Slack's slide "has, if anything, increased our level of concern with respect to Microsoft Teams as a competitive threat."
Dan Ives of Wedbush is even more worried about what's next for Slack.
"The Slack solution is impressive and represents a strong growth opportunity, however we believe penetrating this next phase of enterprises will be incrementally more difficult as the Microsoft/Teams value proposition presents a major competitive hurdle going forward in sales cycles," Ives said in a report.
Ives, who issued coverage on Slack with an "underperform" rating, added that "Slack will have significant difficulty further penetrating the enterprise given the significant competitive offering from Microsoft's TEAM product."
He argued that the competition from Microsoft "could slow growth going forward quicker" than most analysts are expecting. He slapped a price target of just $14 a share on Slack, the lowest target of any Wall Street analyst.
Slack's woes as a new public company mirror the challenges that many other so-called unicorns have faced.
Ridesharing rivals Uber and Lyft and money-losing exercise bike company Peloton have plunged well below their offering prices due to doubts about their ability to earn a profit any time soon. Social media site Pinterest has also struggled as sales growth has slowed.
WeWork shelved its IPO plans due to issues about its corporate governance and history of significant losses.
Even Beyond Meat, which surged from its IPO price of $25 a share to nearly $240 in the first few months after its debut has since pulled back sharply, to $80, over concerns about growing competition from the likes of top rival Impossible Foods and big public food companies Nestle and Kellogg.
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