Needham & Company Maintains a 'Buy' on Ultimate Software (ULTI); Supersized Bookings Growth and Market Share Gains Trumps Moderated Margin Expansion

Needham & Company maintains a 'Buy' on Ultimate Software (NASDAQ: ULTI) price target of $60.00.

Needham analyst says, "The biggest takeaway was the strength of bookings up 47% y/y (organic), which reflects the strength of demand trends, competitive positioning, and product cycles. Given that enterprise pipeline, deal sizes / employee counts, and customer satisfaction continue to head north, we’re incrementally more confident of our 25% recurring revenue growth target in 2012 and beyond."

"ULTI shares could be weaker near-term on overstated concerns with the light Q4 guide and lowered 2012 margin target (vs. street). But we’d refocus investors on top of class recurring revenue growth through the next couple years, accelerating bookings trends, numerous product cycles, and the magnitude of the opportunity still ahead."

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

Shares of Ultimate Software closed at $51.76 yesterday.

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