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.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in