Seeking Alpha

Benefitfocus initiated with acclaim

Benefitfocus (BNFT) is initiated by the Street with gusto, receiving a Buy rating and PT of $50 from Goldman Sachs, Deutsche Bank, Canaccord Genuity, and Jefferies, an Overweight rating and PT of $50 from Piper Jaffray, and a Strong Buy and PT of $51 from Raymond James.

Shares of the cloud-based benefits software provider jumped 102% on IPO day in Sept., but have retreated 22% since then.

Deutsche Bank notes that Benefitfocus "is seeing a mix-shift towards the faster growing employer business (two-year CAGR of 59%), but we conservatively model 25% total revenue growth near-term, and see long-term margin leverage from the growing share of subscription revenue."

Goldman observes, "The Affordable Care Act is creating awareness and causing employers and insurers to invest in online benefits administration applications that can improve self-service, lower costs, and comply with regulations ... We see sustainable, durable growth as industry pressures shift the burden to employees and consumers (from employers), who increasingly shop, enroll, manage, and exchange benefits information with a vast array of parties."

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