New York CNN Business  — 

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 $1.1 trillion compared to Slack’s market value of about $11 billion, is hoping to unseat Slack with its Teams collaborative workplace app.

Still, the Microsoft threat is a big reason why Slack’s stock 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?

Slack reported a big loss and slowing sales growth in September, news that spooked investors.

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.”

Several analysts issued bearish reports on Slack after it reported results, adding to the downward pressure on the stock. Many of the analysts specifically mentioned Microsoft as the reason they were skittish.

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.

IP-No

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.”

Slack’s woes as a new public company mirror the challenges that many other so-called unicorns have faced.

WeWork shelved its IPO plans because of issues about its corporate governance and history of significant losses.

Ridesharing rivals Uber (UBER) and Lyft (LYFT) and money-losing exercise bike company Peloton (PTON) have plunged well below their offering prices due to doubts about their ability to earn a profit any time soon. Social media site Pinterest (PINS) 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 (BYND), 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 below $80, over concerns about growing competition from the likes of top rival Impossible Foods and big public food companies Nestle (NSRGF) and Kellogg (K).