UBS Maintains a 'Buy' on SuccessFactors (SFSF); Cloud Is In-Demand

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

UBS analyst says, "On Saturday, SAP announced it plans to acquire SFSF for $3.4Bn, or an EV/S of 8.1x on CY12 consensus ests (10.9x on UBSe CY12 subscription revs). The 8.1x multiple is 45% higher than the 5.6x price ORCL is offering for RNOW, and 170% higher than the 3.0x median software M&A multiple for CY11 YTD. We believe this points to the mainstreaming acceptance of Cloud applications among enterprises, and legacy vendors’ newfound urgency to accelerate their Cloud initiatives."

"SAP had been in discussions with SFSF for many months, and along with the ORCL/RNOW announcement in late October, these indicate, in our view, that more M&A is likely in the Cloud computing space. Within our coverage universe, Cloud enablers include: VMWare (NYSE: VMW), RedHat (NYSE: RHT), Citrix Systems (Nasdaq: CTXS), Informatica (Nasdaq: INFA), Tibco (Nasdaq: TIBX), and Qlik Technologies (Nasdaq: QLIK); SaaS apps vendors include Concur Tech (Nasdaq: CNQR) and Salesforce.com (NYSE: CRM)."

For an analyst ratings summary and ratings history on SuccessFactors click here. For more ratings news on SuccessFactors click here.

Shares of SuccessFactors closed at $27.27 yesterday.

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