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By Brendan Gilmartin

Tibco Software (NASDAQ:TIBX) is scheduled to report 3Q 2011 earnings after the close on Thursday, September 22. Results are typically released at 4:05 p.m. EST, followed with a conference call shortly thereafter. The provider of infrastructure software is expected to earn Non-GAAP Earnings Per Share (EPS) of $0.21 (high estimate is $0.22) on revenue of $219.92 mln (Source: Yahoo! Finance), up 19.2% from the year-ago period.

Tibco is coming off a string of impressive earnings releases, with Non-GAAP EPS topping estimates by an average margin of close to 12%, while revenues are projected to increase by double-digits over each of the next four quarters. The company continues to benefit from expansion of the data center, cloud-computing, and increasing amounts of customers seeking real-time analytic solutions. Tibco is also widening its product offering and boosting its presence in Asia and emerging economies. The company is procuring government contracts to allow agencies improved real-time decision capabilities. It also provides widely-used low-latency messaging software used across the financial industry. Finally, TIBCO is also a frequently-mentioned takeover candidate, based on its successful business operations.

Despite these positive strides, Tibco is now trading at close to 40x trailing earnings, well above the 5-year average of 29.8x and 4.6x sales, also exceeding the average multiple. In addition, the average Street price target is $32 per share, implying the shares are vulnerable to any missteps when the company delivers 3Q 2011 results.

Sympathy plays: EQIX & RAX. According to Revere Data (www.reveredata.com), Informatica (NASDAQ:INFA) & Progress Software (PRGS) compete in the middleware segment.

Chart Review

After touching a 52-week high of $31.45 in early July, Tibco shares are off about 30%. But since bottoming near $18.50 last month, shares are up close to 25% and holding solid support at the 20-Day SMA. A break above $22 sets up a run toward the 50-Day SMA near $23.50. Support below the 20-Day SMA is $20.(*Chart Courtesy of StockCharts.com.)

TIBX1 TIBX2
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Source: Earnings Preview For Tibco Software