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RPX Corporation Message Board

  • investora2z investora2z May 3, 2013 11:19 AM Flag

    JP Morgan downgrade

    J.P. Morgan has downgraded RPXC from Overweight to Neutral. The target price remains $16.00 which is not far away from the current level. Meanwhile, the stock continued its march after the results where it beat the street as far as revenue estimates were concerned. The quarterly revenue growth (yoy) was nearly 40% and the net income grew by ~82%. The P/E is 18 and the forward P/E is just under 16. This indicates expectations of moderate growth. The price to sales is 3.74 which seems a little high. However, if RPXC can continue its growth story in this expanding market, these valuations will be justified. IP monetization / licensing market is now getting bigger and wider, and several companies have been able to enforce their patent rights against bigger companies. Many companies have changed their business models to leverage maximum benefits from this growth story. Marathon Patent Group (MARA), which has been in the news for the lawsuit filed by its subsidiary Sampo IP LLC. against Sony, Dell, Siemens etc., is now actively acquiring revenue generating patents through acquisition of companies like CyberFone. Marathon has improved its business model to make it a more stable company with a steady stream of revenues. The lawsuit has the backing of Hudson Bay Capital and Iroquois Capital Group, and CEO Doug Croxall is driving the acquisition spree. RPXC will surely benefit from the growth in the IP business, and hopefully it will be able to change the opinion of analysts about its future. Over the last few years the growth has been good, and in 2012 it had a revenue and net income of $43.85 million and $8.08 million respectively. If the growth story continues, then one can look for a decent upside from current levels over the next few quarters. $17.14 is the 52 week high, and that should be next level to watch.

9.94+0.23(+2.37%)May 27 4:00 PMEDT