UPDATE: JMP Securities Downgrades TIBCO Software Following Negative 2Q Results

In a report published Wednesday, JMP Securities analyst Greg McDowell downgraded the rating on TIBCO Software TIBX from Market Outperform to Market Perform, and removed the $26.00 price target. In the report, JMP Securities noted, “We are downgrading TIBCO Software from Market Outperform to Market Perform after the company pre-announced negative 2Q results, with revenue expected to be $250-$252 million versus consensus of $267 million (with license expected to be down 8% yoy), and non-GAAP EPS of $0.12-$0.13 versus consensus of $0.21, leading the stock to decline 12% in the aftermarket. "We are downgrading the shares for three primary reasons: First, market share losses to other analytics vendors seem to be accelerating (our model suggests the Event Processing and Analytics license line, which includes Spotfire, may have been down by ~30%, the third quarter in a row that Spotfire has struggled). Second, investments the company has been making have not yet paid off, with its operating income roughly cut in half in the last two years (from $62 million in 2Q12 to around $33 million in 2Q14) with little growth to show. "Finally, the string of executive departures in the last year suggest there may be more issues than we previously thought, and with the lack of a catalyst in the name (other than rumored M&A), we are stepping to the sidelines until we see an improvement in fundamentals and stabilization in the executive suite.” TIBCO Software closed on Tuesday at $20.79.