UPDATE: Piper Jaffray Raises PT on Kenexa to $46

Piper Jaffray published a research report on Kenexa KNXA and raised its price target from $40 to $46 after the announcement today that IBM IBM plans to acquire the company. In the report, Piper Jaffray wrote, "Today IBM announced its intent to acquire Kenexa (KNXA) for $1.3B, or 3.2x EV/FTM revenues, completing a 1,101% climb for KNXA shares since March 6th, 2009. This represents the seventh public SaaS company acquisition since October 2011, and marks the second SaaS purchase for IBM. The 42% premium offered by IBM over the last closing price of KNXA echoes our view that KNXA carried substantial unrealized M&A takeout value which was widely unrecognized by investors, and that it was unfairly perceived and discounted as a "services" company despite its demonstration of a strong software business, which comprised 70-80% of the company's revenue. In the last couple of years, we have repeatedly highlighted the apparent discount of KNXA shares at 1-2x EV/FTM sales as compared to the broader SaaS comps at 4x. We view the transaction as a positive for CSOD and a slight negative for ORCL." Piper Jaffray maintained its Overweight rating on Kenexa, which is currently trading up 41.56 percent from Friday's $32.39 closing price.