Taleo Takes Off

Software developer Taleo's (Nasdaq: TLEO  ) shares have surged a tidy 66% over the past six months. The company is proving that its growth is sustainable, and it should gain an additional boost from upcoming product launches.

Taleo develops software to help companies with managing resumes, employee screening, and performance management. Its Web-based products can easily scale to meet the needs of everyone from small firms to titans like Citigroup (NYSE: C  ) and Dell (Nasdaq: DELL  ) .

For the Q1 results reported on Monday, Taleo increased revenue 29.6% to $28.7 million, and posted net income of $908,000, or $0.03 per share. This compares to a loss of $594,000, or $0.03 per share, in the year-ago period.

The company continued to rack up customers, gaining 14 new enterprise customers and 140 new small and medium-sized clients. Taleo seems to be benefiting from distribution partners such as IBM (NYSE: IBM  ) and Accenture (NYSE: ACN  ) .

In early March, Taleo purchased the assets of JobFlash, which helps companies schedule interviews with non-English-speaking job recruits, for $3 million. The deal gained Taleo 60 new customers, along with new features such as multilingual telephone services.

Taleo's in-house R&D is formidable, too, giving the company a healthy pipeline of new products for 2007. It plans to launch its Taleo 7.5 software, as well as a performance management product. The company's growing customer base should provide some favorable leverage for these new offerings.

Taleo issued upbeat guidance of $30 million to $30.5 million in revenue for Q2, and earnings of $0.09 per share. The company trades for a reasonable 2.9 times revenue, and as other Web-based players like have shown, companies in this space with consistently strong growth can offer savvy investors considerable upside.

Further Foolishness:

Dell and Accenture are Inside Value picks, while Dell does double duty as a Stock Advisor selection. Try any of our Foolish newsletters free for 30 days.

Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 1,610 out of 28,402 in CAPS. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 527587, ~/Articles/ArticleHandler.aspx, 10/25/2016 8:55:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
ACN $115.27 Down -0.53 -0.46%
Accenture CAPS Rating: ****
C $49.59 Up +0.01 +0.02%
Citigroup CAPS Rating: ***
DELL.DL $0.00 Down +0.00 +0.00%
Dell CAPS Rating: *
IBM $150.88 Up +0.31 +0.21%
IBM CAPS Rating: ****