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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