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Tibco Software (NASDAQ:TIBX) has lost a good amount of value since August on growth fears. However, the last 3 quarters, TIBX has been beating analyst estimates and management has risen 3Q guidance and revenue is above analysts' predictions.

Aside from predictions, TIBX has shown positive signs. In April, VERO (provides automated financial services to banks, credit unions, etc) announced they would be using Tibco's in-memory software for quicker processing and higher data integrity.

Then in May, the Department of Defense selected Tibco's Spotfire Analytics software to be used for the Intelligence Information System. The users of the Spotfire software will be able to make "on the spot" decisions quicker giving them a greater advantage over competitors.

Tibco has made a some acquisitions over the last year or so that have put the company in better position to expand internationally. At the end of August, Tibco acquired Nimbus Partners, a business process practice based in the UK. The Nimbus acquisition will help Tibco's effort for businesses to make better operations decisions.

This comes after Tibco's acquisition of Loyalty Lab in December 2010, to expand internationally in the customer loyalty market. The move comes as Tibco wants to help customers better interact with businesses. As Ram Menon, Tibco's Executive Vice President of World-wide Marketing, put it, the acquisition "supports not only customer transactions but also real-time customer interactions or events, and a platform that scales to billions of such events across an increasingly social and mobile marketplace"

Aside from the number of deals and acquisitions, Tibco has been a takeover target for years and the takeover chatter is starting once again. Tibco would be a great addition to companies such as SAP (NYSE:SAP), HP (NYSE:HPQ), and IBM (NYSE:IBM). Tibco has proven they have a successful business operation that can outperform.

If the company is taken over, you could be sitting on a nice gain if you pick up shares cheap now. However, in this tough economic climate, who knows what will happen. One thing is for sure, Tibco would be a gold mine for the company that acquires it.

The company announces 3Q results next week on September 22. Analysts are expecting EPS to come in around $.33 a share. If Tibco can continue the trend of beating estimates, we could see a breakout and more takeover chatter.

As for performance, the last month has been painful for shareholders with a loss of 10%. That being said, in the last several days, there has been a lot of buying interest as the stock recently broke resistance.

If the company reports well, I believe we could see the share price rise back above $25. Over the long term, I think Tibco goes higher as they expand to new markets and continues winning deals.

Fundamentally, the stock sports a P/E of 40, which may seem high, yet compared to the rest of the industry average of 72, it is cheap. However, the company's forward P/E is at 20, which points to higher earnings in the future. Other long term indicators such as PEG come in at 1.59 and earnings growth over the next 5 years come in at 16.5%. Not too shabby. The stock doesn't currently pay a dividend but the company has a very low debt load. Ultimately, the fundamentals are decent compared to the rest of the industry.

Bottom line: Tibco offers a great takeover play, along with decent growth over the long term. The company's acquisitions have proven great and profitable. I would wait till after earnings to buy the stock to confirm the potential breakout, but I believe they will beat the analysts' predictions.

Disclosure: I am long TIBX.

Source: Tibco Software Is A Buy