Needham & Company Downgrades Ultimate Software (ULTI) to Hold; Solid But Not Sweet Enough

Needham & Company downgraded Ultimate Software (NASDAQ: ULTI) to Hold.

Analyst, Michael Huang, said, "While the quarter was solid and while nothing that we’ve uncovered suggests any deterioration of trends, we’re nevertheless taking down our rating to Hold primarily to reflect premium valuations and to reflect a non-optically impressive quarter coming in 1Q12 where recurring rev growth rates (y/y) could decelerate sequentially by 400 bp."

"While this deceleration is temporary and arguably already well understood (reflects lengthening deployment cycles due to larger deals), we still wouldn’t be surprised to see some multiple compression until near-term until there’s more conviction around the mega deals (signed last year) turning on as planned later in 2012."

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

Shares of Ultimate Software closed at $67.98 yesterday.

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