Friday, FBR Capital Markets downgraded Taleo Corp. (TLEO) shares to Underperform from Market Perform and lowered its price target to $14 from $17.
Analyst David Hilal said that his downgrade is predicated upon: his checks indicate deal closure rates have not improved; his checks suggest the Vurv customer migration is facing stronger-than-expected headwinds; given these checks, he believes Street expectations for second half of 2009 could prove overly optimistic; and a jobless recovery could mute demand for talent management solutions.
In the analyst's view, the discretionary nature of Taleo's software solutions should continue to cause extended sales cycles and spending reluctance. The analyst also believes renewals are under pressure.
Although the company has successfully broadened its talent management suite and is in the process of giving its applicant tracking system a makeover, the analyst does not expect these new product initiatives to materially drive new bookings growth in the near term.
Over the past three months, the shares have materially outperformed (up 46% versus the Nasdaq up 13% and its SaaS peer group up 26%) and the analyst believes embedded expectations are likely ahead of reality. This is not a call into second quarter earnings, as the analyst believes the quarter shaped up in line. The analyst's new price target of $14 represents 17x his 2010 pro forma EPS estimate.
Currently, TLEO is down $1.27 or 6.84% and trading at $17.30.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.