Back to top

Analyst Blog

The Ultimate Software Group Inc. (ULTI - Snapshot Report) is focusing on enhancing the features of its flagship human capital management (HCM) solution – UltiPro – through acquisitions. After acquiring predictive analytics solutions provider Vestrics in the second quarter of 2016, the company recently announced that it is buying San Francisco-based technology company Kanjoya.

Although the terms of the deal were not disclosed, Ultimate expects the Kanjoya acquisition not to contribute meaningful revenues in fiscal 2016. Ultimate's shares declined 0.5% to close at $204.39 on Sep 30.

A provider of cloud-based workforce intelligence and analytics platform for enterprises, Konjoya’s unique employee sentiment technology has won many accolades in recent times. The company was recognized as an awesome new startup at the HR Technology Conference & Expo in Oct 2015. Market research firm Gartner also named Kanjoya as one of four “Cool Vendors in Human Capital Management” for 2016.

Ultimate is set to launch a new product named UltiPro Perception based on Kanjoya’s technology, which will help companies collect, understand and act on employee feedback. Ultimate is also setting up an additional research & development hub in San Francisco.

As compared with traditional tools, UltiPro Perception is much faster in collecting employee input through surveys (both quantitative and open-ended questions) and providing in-depth analysis of employee feedbacks. The timely results will help companies understand the needs and concerns of employees that will finally improve talent retention rate as well as performance.

ULTIMATE SOFTWR Price and Consensus



We believe that the augmentation of UltiPro’s features will not only improve customer retention rate but also attract new customers on a regular basis. This will eventually boost recurring revenue growth. Management anticipates recurring revenues to increase 26% year over year in 2016.

Zacks Rank & Key Picks

Currently, Ultimate has a Zacks Rank #3 (Hold).

Better-ranked stocks in the sector include Avid Technology (AVID - Snapshot Report) , which sports a Zacks Rank #1 (Strong Buy). Estimates for 2016 and 2017 have surged $1.08 (108%) and 30 cents (23.1%), respectively, to $2.08 and $1.60 over the last 60 days.

Infoblox's (BLOX - Snapshot Report) , estimates for 2016 has reversed from a loss of 31 cents to earnings of 10 cents over the same time frame. For 2017, the estimate has also reversed from a loss of 28 cents to earnings of 35 cents and it also sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Adobe Systems (ADBE - Analyst Report) carries a Zacks Rank #2 (Buy). Estimates for 2016 and 2017 have surged 14 cents (6.1%) and 9 cents (2.9%), respectively, to $2.42 and $3.20 over the last 60 days.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>