SkillSoft (NASDAQ: SKIL) provides on-demand internet-based training courses for professionals in business and information technology (IT). The company catalog includes more than 6,000 courses addressing such issues as project management, sales, business strategy, finance, regulatory compliance, operating systems, network technologies and web design. SkillSoft also offers online coaching for more than 100 IT certification exams and provides access to some 14,000 engineering, IT, and business books online. Clients include IBM (NYSE: IBM), Merck (NYSE: MRK) and Yahoo! (NASDAQ: YHOO).

The firm pleased investors last week, when it reported Q3 EPS of six cents and revenues of $75.1 million. Analysts had been expecting break-even earnings and revenues of $73.5 million. Management also guided FY08 EPS to 22-24 cents (20 cent consensus) and FY08 revenues to $276.7-$280.0 million ($276.93M consensus). Stifel Nicolaus subsequently reiterated its "buy" rating on SKIL and boosted its price target to $13. The share price popped on the earnings news and then moved into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Altogether, brokers now recommend the issue with two "strong buys," one "buy" and one "hold." Analysts see a 32 percent growth rate, through the next year. The SKIL Sales Growth rate (31.52%), Net Profit Margin (12.90%) and Return on Equity (22.26%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 78 percent of the outstanding shares. Over the past 52 weeks, the stock has traded between $5.53 and $10.22. A stop-loss of $8.35 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.