The results have given another leg to the uptrend. It is getting close to the 52 week high and some analysts are of the opinion that the valuations may be getting stretched. JP Morgan analysts have downgraded RPXC to neutral from overweight and the target price is only $16. This indicates that the analysts are not expecting much movement in the stock, and they think that the valuations are high. The stock is up more than 82% from its 52 week low of $8.55, and that could be one of the reasons for the lack of confidence in further growth of the stock. The trailing P/E is ~18 and the forward P/E is 15.62. This small difference also indicates lack of confidence in growth. Even the price to sales of 3.74 is high. However, if one sees the results of previous quarter, the revenue growth (yoy) was nearly 39.6% and the net income grew by 81.8%. RPXC is a zero debt company with cash of more than $283 million (against annual revenue of $215 million). Most importantly, the market of patent monetizations / enforcements is continuously growing and more and more companies are requiring consultancy / and other services. Companies are making this a business model, and some other organizations are going even beyond that. Marathon Patent Group (MARA) has filed a patent infringement lawsuit (through its subsidiary Sampo IP LLC) against big companies like Sony, Dell, Siemens etc. This lawsuit has the backing of famous small cap investors like Hudson Bay Capital, Iroquois Capital Group, Barry Honig etc. Now, Marathon is using services of IP Navigation for acquiring and expanding its patent portfolios. It recently acquired a company CyberFone and some other patents which are revenue generating. RPXC will hopefully be able to expand its client base so that the growth story can continue. Investors would hope that JP Morgan's target is taken out within a few days.
