UBS Maintains a 'Buy' on SuccessFactors (SFSF); Q3: Strong Billings/Revs; Weak Cash Flows

UBS maintains a 'Buy' on SuccessFactors (NASDAQ: SFSF) price target lowered from $40 to $37.

UBS analyst says, "SFSF delivered a positive Q3 as pre-announced. Rev upside ($95M vs. initial guide $83-34M) came from faster than expected deployments (also benefits subs rev rec) and Plateau. Billings growth upside (+42% y/y vs. our 29% est.) came from both Plateau and core SFSF pdts. While mgmt continues to monitor for any macro impact, it has yet to see a slowdown in spending and remained upbeat on guidance – FY11 billings was raised from 34% to 36% and Q4 rev guided to $95-97M vs. consensus $90M. We model FY11 growth of 59% in revs and 36% in billings."

"Raise Q4 ests; conservative tweaks to FY12: Q4 estimates to/from: rev $97M/90M, EPS $0.01/$0.00, but CFFO to/from $8M/$23M. FY12 rev estimate raised $6M to $397M for 19% y/y growth, which could be conservative vs. our billings growth ests of 36% FY11 & 31% FY12; EPS estimate unchanged at $0.10."

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

Shares of SuccessFactors closed at $27.27 yesterday.

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