Friday, December 20, 2013

Seeking Alpha: TIBCO's Return To License Growth Frustratingly Inconsistent

Wanting to like a stock can be dangerous, as TIBCO (TIBX) is showing once again. TIBCO is a solid player in business optimization and process management, offering companies platforms to integrate and analyze operational data, but the company has been having a difficult time with sales execution and the willingness of larger rivals to compete on price. While the company had done a good job of rallying the troops and getting investors and analysts to buy into a growth recovery story, the company's fourth quarter results and first quarter guidance are a setback.

For better or worse, what the stock needs is consistent license revenue growth in the high single digits or low double digits (growth above the underlying market); margins and cash flow may matter more in the long run, but software stocks trade on revenue growth in the short term. I am optimistic about the company's ability to improve sales execution and shift customer perceptions toward a view that it is a strategic infrastructure, optimization, and management technology company, but the path has been frustratingly inconsistent. I believe these shares are undervalued to a meaningful extent, but I won't pretend that valuation is more important than growth in 2014.

Rad more here:
TIBCO's Return To License Growth Frustratingly Inconsistent

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