Tuesday, January 11, 2011

Concur (Nasdaq:CNQR), SuccessFactors (Nasdaq:SFSF), Oracle (Nasdaq:ORCL), Limelight (Nasdaq:LLNW) Should Outperform

Concur (Nasdaq:CNQR), SuccessFactors (Nasdaq:SFSF), Oracle (Nasdaq:ORCL) and Limelight (Nasdaq:LLNW) are all considered outperformers by FBR, with all of them considered leaders in their respective sector.

FBR said, "With the start of each new year, we like to look at how our covered companies will perform against Street expectations for that year.

"Specifically, we break down expectations into two components: (1) consensus estimates and (2) what we believe are the embedded expectations in the shares. Sometimes they are synonymous; sometimes they can vary dramatically, particularly in our sector. While executing against these expectations is only one factor driving share performance, it clearly is an important one. It is under that premise that we then chart the potential performance against each expectation to graphically depict those shares that we believe should outperform."

1) SaaS vendors of choice: We believe Concur Technologies (Nasdaq: CNQR) and SuccessFactors (Nasdaq: SFSF) can both execute well against expectations. Regarding Concur, we believe the company's numerous growth initiatives will help drive upside, most notably in the back half of the year. For SuccessFactors, we expect the company's renewed focus on building out sales capacity and targeting new customer growth, combined with an expansive suite of solutions and an underpenetrated market, should provide significant tailwinds that allow the company to post better-than-expected billings growth.

2) Traditional software vendor of choice: We think Oracle (Nasdaq: ORCL) is best positioned among the traditional software vendors because we think there are greater cost synergies to be had with the Sun acquisition than expected and because we believe the company will start to compete sooner and better than expected in the integrated systems marketplace; all of which should drive consistent and modest outperformance versus expectations.

3) CDN of choice: Of the two pure-play content delivery network (CDN) vendors, we prefer shares of Limelight Networks (Nasdaq: LLNW). We believe this turnaround story is still in progress, that expectations remain low, and that the company's ability to execute against those expectations is good.

Concur was trading at $54.97, up $0.29, or 0.53 percent, as of 11:29 AM EST. SuccessFactors SuccessFactors was at $31.33, up $0.21, or 0.67 percent. Oracle was trading at $31.00, down $0.04, or 0.10 percent. Limelight was at $6.16, down 0.09, or 1.44 percent.

No comments: