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RPX Corporation Message Board

  • investora2z investora2z Oct 18, 2013 6:53 AM Flag

    Earnings could be the next trigger

    Earnings are a couple of weeks away, and that could be the short term trigger for the stock. The stock has appreciated by 15% over the last two months, and good earnings may take it beyond the $19 levels. However, increase in stock price before the earnings will make the exposure risky. Earnings exposure has a 50-50 chance of success. Even RPXC did not do well in the last earnings, as the performance was not up to expectations. The valuations are a bit high now, though good Q3 earnings may improve the P/E & P/S. Currently, the ttm P/E is around 21.66, and the forward P/E (fye 31-Dec-2014) is 16.75. The PEG ratio is also not too high at 1.59 which indicates moderate expectations for growth. This is inline with the management guidance. The guidance for the full year revenue is around $229 - $235 million and Non-GAAP Net Income is expected to be between $50 - $53. The ttm revenues are around $217 million and the net income is $43 million. The price to book ratio is around 2.32 and the price to sales is 4.24. Considering the expected growth in the market, the future prospects look good. However, competition is also increasing with several companies working aggressively to increase their market presence. There are also patent assertion entities like Spherix (SPEX) which have acquired patents with a clear strategy to monetize them through litigation and licensing. RPXC's balance sheet is strong as it has no debt with $259 million cash (on June 30). So if the company can beat the estimates and deliver a good set of numbers, the possibility of a strong uptrend is high. On the other hand, negative surprises could lead to profit booking because the stock has already run up quite a bit.

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