UPDATE: Canaccord Genuity Initiates Coverage on Benefitfocus as Positive Factors Drive Premium Valuation

In a report published Monday, Canaccord Genuity analyst Richard Davis initiated coverage on Benefitfocus (NASDAQ: BNFT) with a Buy rating and $50.00 price target.

In the report, Canaccord Genuity noted, “As the leading cloud vendor of benefits administration software to the employer and insurance carrier market, Benefitfocus is well positioned for a sustainable run of top-tier growth. Secular tailwinds in the form of government-mandated healthcare coverage as well as increasing employer adoption of defined contribution models have raised the importance of benefits automation software in the IT spending queue. With a favorable revenue mix shift driving accelerating growth and the expectation of material operating leverage, we believe investors will reward BNFT with a premium valuation. If we're right, there's every reason to expect the stock to return to post-IPO highs in the low $50s. We're initiating coverage of BNFT with a BUY rating and $50 target.”

Benefitfocus closed on Friday at $41.86.