Ultimate Software Group, Inc.’s (ULTI) Fourth-Quarter Review

Analyst Terry Tillman at Raymond James (NYSE: RJF) has released an update on Ultimate Software Group, Inc. (NASDAQ: ULTI). The company has reported results for the fourth-quarter.

Ultimate Software Group posted recurring revenue of $35.7 million, a 24% year-over-year increase, but below Raymond James’ estimate of $36.7 million. The company reported total revenue of $52.3 million, a 5% year-over-year increase, and beating Raymond James’ estimate of $52 million. The upside mainly came from services and license revenue.

The company had non-GAAP EPS of $0.10 for the quarter, which came in line with estimates. The company also repurchased stock worth $5 million in the quarter, and ended with $29.6 million in net cash.

The company also issued guidance for revenue and non-GAAP operating margins for 2010. The company expects a 27% year-over-year growth in recurring revenue, and an 18% year-over-year growth in total revenue, in 2010.

Analysts at Raymond James have lowered the price target for Outperform rated Ultimate Software Group, Inc. from $32.50 to $32. The price target has been lowered due to the modest decline in 2010 revenue estimates.

Analysts recommend buying the Ultimate Software Group’s share on any potential weakness around the modestly lower outlook given the company’s strong relative growth profile.