Needham & Company Reiterates Buy on WageWorks (WAGE) as Business Trends Remain Solid

Needham & Company maintained a Buy rating on WageWorks (NYSE: WAGE), and cut the price target to $55.00 (from $57.00), following the company's 4Q earnings report. WAGE reported 4Q revenue of $83.1 million, up 6% Y/Y and above consensus of $81.8 million. The company is coming off a strong enterprise and SMB selling season and successful open enrollment period. Management introduced FY16 revenue guidance of $356-366 million based on 7-10% Y/Y organic growth, slightly below consensus of $369 million.

Analyst Mayank Tandon commented, "WAGE reported strong 4Q results, with outperformance on revenue, margins, and earnings. The company is coming off a strong enterprise and SMB selling season and successful open enrollment period. With strength across its core healthcare, commuter, and COBRA products, the underlying business trends remain strong, setting WAGE up to deliver another year of solid revenue growth with margin expansion. Management introduced guidance that is largely in line with expectations after adjusting for the previously announced impact from exiting the public exchange business. We see potential for upside to guidance and estimates as secular and regulatory tailwinds fuel growth. We maintain our BUY rating but trim our target to $55."

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

Shares of WageWorks closed at $42.06 yesterday.

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