Goldman Sachs Reiterates Buy On SuccessFactors (SFSF)

Goldman Sachs is reiterating its Buy rating and moving up its price target on shares of SuccessFactors (NASDAQ: SFSF) to $26 from $24 based on the company's earnings results.

In the research report, Goldman writes, "We are lifting our 12-month price target to $26 from $24, as we raise our revenue expectations on the heels of a 35% yoy bookings growth quarter, as well as incorporating the INFORM and CubeTree acquisitions and the change in accounting treatment for services – EITF 08-01. Our 2009-2012E revenue CAGR of 28% is driven by (1) continued penetration of the Performance and Talent management market, which we view as still largely
greenfield; (2) up-sell of adjacent modules – SFSF still averages only about a third of modules sold into the installed base; and, (3) increased traction of
new offerings, such as Biz X, and including the new analytics and social software capabilities of the two acquisitions. Cash flow also continues to track upward, in line with increased business momentum – the company
has now completed 65% of its corporate goal to double cash flow in CY2010. We expect 54% and 39% cash flow growth in the next two fiscal years as the recurring revenue component drives improving profitability."

Shares of SuccessFactors are currently trading at $22.68, up 1.27%‎ on the day.