Why Tibco Software (TIBX) is Plummeting

NEW YORK (TheStreet) -- Tibco Software (TIBX) has shed significant share value during Friday's session, plunging 14.3% to $20.99 by midday.

A day earlier, the software developer gave lower-than-expected guidance estimates for the first quarter, expecting net income of between 17 cents and 18 cents a share on revenue in the range of $247 million to $253 million. Analysts polled by Yahoo! Finance expected earnings of 21 cents a share on $255.35 million in revenue. 

Also a cause for concern, fourth-quarter license revenue of $139.8 million was in the mid-range of guidance projections, indicating sluggish service and maintenance revenue further down the line.

TheStreet Ratings team rates Tibco Software Inc as a Buy with a ratings score of B-. The team has this to say about their recommendation:

"We rate Tibco Software Inc (TIBX) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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