Oppenheimer Reiterating Outperform On Kenexa

Oppenheimer & Co. is reiterating its Outperform rating and $34 price target on shares of Kenexa KNXA. In a note to clients, Oppenheimer & Co. writes, "Following KNXA's late-May 2011 secondary (that brought in ~$80M in net proceeds) we are adjusting our model to reflect the dilution from the deal. We believe that KNXA is on track to deliver a strong qtr and will not be meaningfully impacted by recent economic weakness (e.g., RPO contracts are well structured & less susceptible to moderate employment swings). KNXA's combined technology/service offering gives the firm a unique position in the HCM market which mgmt should be able to convert into solid double-digit growth. At ~$24, KNXA trades at 21.6x our CY12E FCFPS of $1.11, below the SaaS group range of 25-35x. We believe a higher multiple is warranted given accelerating growth and improving business trends." Shares of KNXA gained 34 cents today to close at $24.58, a gain of 1.4%.