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UPDATE: Wedbush Securities Initiates Ultimate Software Group at Neutral; Upside Baked In

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Wedbush Securities initiated coverage on Ultimate Software Group (NASDAQ: ULTI) with a Neutral rating and a $86 price target.

Wedbush Securities noted, "[W]e see a few potential negative catalysts. One risk is any lengthening of implementation cycles due to larger, more complex deals; this development could reduce ULTI's recurring revenue and EPS over a 3-quarter time frame, as happened in 2Q08. A second risk would be deceleration of ULTI's EPS growth as the pace of accruals abates. In the recent 3Q, ULTI began capitalizing a portion of R&D spend, which we believe will defer about $12M in costs from the FY13 income statement. We see sound reasons for ULTI's business model changes, which have given rise to other accruals, but ULTI's growing accruals may be creating over-optimism about its sustainable long-term earnings growth."

Ultimate Software Group closed at $97.56 on Wednesday.

Latest Ratings for ULTI

DateFirmActionFromTo
Oct 2014Canaccord GenuityMaintainsBuy
Oct 2014MKM PartnersInitiates Coverage onBuy
May 2014FBR CapitalInitiates Coverage onMarket Perform

View More Analyst Ratings for ULTI
View the Latest Analyst Ratings

Posted-In: Wedbush SecuritiesAnalyst Color Initiation Pre-Market Outlook Analyst Ratings

 

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