NEW YORK (TheStreet) -- Shares of TIBCO Software Inc. (TIBX) are up 6.94% to $22.50 in pre-market trade after it was reported that the provider of middleware and infrastructure software, which is being urged by an activist investor to explore a sale, has begun to pitch its business to private-equity firms as it reviews its strategic options, sources told Bloomberg.
The company has approached firms including Bain Capital LLC and KKR & Co. (KKR) to gauge their interest, sources added.
In a statement, the company said hat it's working with Goldman Sachs Group (GS - Get Report) and law firm Wilson Sonsini Goodrich & Rosati on its review.
TheStreet Ratings team rates TIBCO SOFTWARE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate TIBCO SOFTWARE INC (TIBX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that TIBX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.90 is high and demonstrates strong liquidity.
- The gross profit margin for TIBCO SOFTWARE INC is currently very high, coming in at 72.52%. Regardless of TIBX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TIBX's net profit margin of 0.61% is significantly lower than the industry average.
- Net operating cash flow has decreased to $18.05 million or 27.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of TIBCO SOFTWARE INC has not done very well: it is down 8.51% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: TIBX Ratings Report