Shares of corporate software developer Tibco (TIBX) are up $1.51, or almost 7%, at $23.51 after the company last night reported fiscal Q4 results ahead of expectations and offered a Q1 and a year outlook that topped analysts’ estimates.
Mizuho Securities USA’s Gabriel Lowy this morning raised his rating on the stock to Buy from Neutral, but cut his price target to $27 from $29, writing that the results in Q4 were “excellent” and that they “vanquish most of our macro and financial vertical market concerns.”
Tibco shares had “over-corrected,” writes Lowy, resulting in “risk/reward considerably more attractive on our raised estimates.”
He’s not concerned that license revenue was up 17%, down from a rate of 25% in past quarters, writing that “we were pleased amid a challenging environment.”
Hiring of sales reps may contribute upside, though it will “compress” profit margin, writes Lowy.
Lowy raised his estimate for this fiscal year to $1.038 billion from a prior $1.014 billion, and raised his EPS estimate to $1.15 from a prior $1.09.
“After advocating SOA [services-oriented architecture] for years,” writes Lowy, “TIBCO is at the center of one of the most significant re-architecting of IT systems in a generation.”
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