Benchmark Downgrades Saba Software (SABA) to Hold; Business Model Transition Being Pushed Out

Benchmark downgraded Saba Software (NASDAQ: SABA) from Buy to Hold.

Benchmark analyst says, "We are downgrading SABA in the wake of last night’s F4Q11 earnings release where the Company missed our and the Street’s estimates for total revenue, bookings and EPS, and management lowered FY12 revenue and EPS expectations meaningfully below the consensus. While we’re still believers in story (i.e., learning solutions replacement cycle, transition to a more stable and visible recurring revenue model), the Company’s move to a subscription-based revenue model appears to be taking longer than we initially anticipated. As such, we expect the stock to drift lower (or sideways at best) for another couple of quarters until there’s more clarity surrounding the business model transition."

"We’re lowering our FY12 EPS estimate by $0.08 to $(0.19) mainly for accounting
reasons (i.e., revenue recognition), and taking up revenue $2 million to $131
million."

For more ratings news on Saba Software click here and for the rating history of Saba Software click here.

Shares of Saba Software closed at $9.43 yesterday.

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