Kenexa Corp - Aggressive Growth
November 16 2011 - 7:00PM
Zacks
Kenexa Corp. (KNXA) has been busy the past 2 weeks. An
earnings surprise, an acquisition, and a major deal with a new
customer have led to upward estimate revisions and landed KNXA
amongst the Zacks #1 Rank (Strong Buy) stocks.
Company Description
Kenexa provides software and services that help companies
recruit and retain employees. HR solutions focus on employee
assessments, compensation, recruitment, leadership and other
areas.
Positive Earnings Surprise
On Nov 2 Kenexa reported third-quarter results that showed 52%
increase in total revenues, to $77.2 million. There were several
areas of growth, but the recruitment services are the majority of
the business and had a record quarter.
Earnings per share came in at $0.17, 2 cents higher than the
Zacks Consensus Estimate. Kenexa has now topped forecasts in 5 of
the past 6 quarters.
Kenexa wrapped up the quarterly report with higher guidance for
the rest of the year.
Estimates Move Higher
Analysts raised full-year estimates to account for the surprise
and then another penny due to an optimistic outlook. The Zacks
Consensus Estimates for 2011 is up 3 cents, to $0.59.
Next year's average forecast rose 4 cents, to $0.82. Given the
$0.44 earned in 2010 the projected growth rates stand at an
impressive 34% and 39%, respectively.
M&A and News
In the past week Kenexa has made a few headlines as well. On Nov
14 the company announced the acquisition of Batrus Hollweg, a
talent management solutions company that focuses on hospitality.
The deal was paid for with $11.5 million in cash.
Just yesterday Kenexa announced a 5-year engagement with Eli
Lilly (LLY).
The ChartAC
Shares have been surging lately, which has led to lofty
valuations. But, if the estimates keep improving the stock could
keep going in the short term.
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