UPDATE: Stifel Nicolaus Initiates Kenexa with Hold; Economic Cycle Caution

Stifel Nicolaus initiates a Hold rating on Kenexa

as the company may be exposed to volatility of economic cycles. Stifel Nicolaus says, "While its RPO business has rebounded back from recession lows, we caution that it is more sensitive to economic cycles than its SaaS-only peers. Given the large market opportunity and recent industry consolidation, we expect Kenexa to continue investing in S&M and R&D and pursue M&A. While these investments will most likely limit margin expansion in the near term, we believe it is the right strategy and expect Kenexa to deliver at least mid-teens revenue growth for the next few years." KNXA closed at $33.43 on Thursday.