Needham & Company Reiterates a 'Buy' on SS&C Technologies (SSNC); Licenses Fall Short, But Pending Deals Look Accretive

Needham & Company reiterates a 'Buy' on SS&C Technologies Holdings (NASDAQ: SSNC) price target of $26.00.

Analyst, Mayank Tandon, said, "SSNC's 1Q fell short on revenue, and full year revenue guidance was trimmed as several license deals were pushed out. Management was able to offset most of the impact from the shortfall in license sales with expense management and deliver EPS in line with the Street. Overall organic growth came in at 3.4% Y/Y, about 2% below target because of the drop-off in licenses, while software-enabled services revenue rose a healthy 9% Y/Y organically. The fund administration segment was the strongest performer with nearly 18% Y/Y organic growth. Operating margins expanded 20 bps Y/Y and EPS grew 17% Y/Y. After the recent rally in the shares, we would not be surprised to see the stock sell off on the results. But we are reiterating our rating because we believe the pending GlobeOp and Portia deals have the potential to be significantly accretive, and valuation remains attractive, in our view, at 18x our CY13 EPS outlook before the impact of the accretion."

For an analyst ratings summary and ratings history on SS&C Technologies Holdings click here. For more ratings news on SS&C Technologies Holdings click here.

Shares of SS&C Technologies Holdings closed at $23.37 yesterday.

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