Tibco CEO Vivek Ranadive On Valuation: "The biggest opportunity since the stock was five dollars"
Revenue for the fourth quarter was 315.5 million versus expected 312.16 million and EPS came in at $0.42 versus $0.39. Despite the earnings beat, shares slid more than ten percent Friday on lower than expected guidance.
Ranadive addressed the guidance stating, “We went conservative with the first quarter guidance because we want to under promise and over deliver... To me, it is a little surprising how the market reacted.”
Speaking on valuation, Ranadive discussed Spotfire, the company’s real time data visualization tool. “To me, just Spotfire alone is worth what the business is trading at right now. It is the ultimate big data visualization tool, and the irony is that Spotfire is bigger than Tableau. Whatever our stock price is, Tableau [3.91 billion market cap] is worth more than all of Tibco [3.62 billion market cap]. Spotfire by itself should be trading at $25 dollars a share.”
Focusing on the traditional software infrastructure business, Ranadive emphasized Tibco’s diverse client base. Although banks will continue to be key customers, the most growth is being seen in industries such as logistics, transportation, and utilities. Ranadive pointed out that a key reason is that all business are seeing themselves as retailers because the client relationship is becoming increasingly important.
These statements, paired with what he describes as unprecedented demand, culminated in the chief executive describing the current buying opportunity. “I believe this is going to be the biggest opportunity since the stock was five dollars because we are positioned to be the enterprise software company of the 21st century. We focus on mobile, on real time, on cloud, and nobody else has that.”
He went on to describe how the company’s position relates to Oracle in the 1990’s. “We have already put in the integration infrastructure and the opportunity around that is ten times a big; just as Oracle did with the database and sold the tools and applications around the database. The same is true here, we have a tremendous up sell opportunity.”
Shares of Tibco have been flat over 2013.
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