Kenexa Hit by Soft Jobs Market

Kenexa Corp. (KNXA - Analyst Report) is a leader in recruitment management software. Kenexa's solutions provide talent acquisition and employee performance management solutions on an on demand basis for its customers. To bolster its international presence and improve traction with multi-national companies, the company acquired Brass Ring, giving Kenexa the ability to offer multilingual modules.

We believe that economic uncertainty is responsible for a slowdown in Kenexa's revenue growth. With an unemployment rate of 6.7% in November, we believe higher levels of unemployment are likely to persist though 2009 as well. Although KNXA valuations are low, we have a low confidence factor on our estimate for late 2009 and 2010.

We would not be buyers of the stock until KNXA demonstrates that it can outperform its peers. We reiterate our Hold rating with our target price of $8.

Anita Mohata contributed to this report.

Read the full analyst report on KNXA.