Riskified Ltd. (RSKD) saw its stock price plummet by 5.40% in Friday's intraday trading session, following a downgrade by UBS analysts. The sell-off comes after UBS lowered its price target on RSKD to $4.50 from $4.75, citing the company's recent challenges.

According to UBS, Riskified announced the loss of a large merchant in the Home category at the end of October, resulting in a $23 million revenue loss on a pro forma full-year basis. Additionally, the company faced a fraud event in the second quarter, further weighing on investor sentiment.

Despite these setbacks, UBS acknowledged that Riskified's combination of brand-name enterprise clients, low penetration for chargeback guarantee solutions, and a large eCommerce end-market provide attractive tailwinds. However, the analyst firm sees a more balanced risk-reward for RSKD shares in the near- to medium-term, particularly in light of the recent merchant loss and fraud event.