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The stock has appreciated by 45% on a

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investora2z   Sunday, 07/28/13 12:11:16 PM
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The stock has appreciated by 45% on a 52 week basis. In fact, it is up more than 90% on a YTD basis, and is still looking strong for more. The immediate trigger will be the earnings being released in a couple of days. The performance of the company has been great over the last few years. The revenues and the net income have grown exponentially since 2009, and even the recent quarters have been good. The revenue growth in the last quarter was nearly 40% and the net income increased by more than 80%. the balance sheet is strong with zero debt on books and more than $280 million in cash (as on March 31). Barclays Capital had increased their PT for the stock from $17 to $18 and Zacks have a PT of $17.70. JPMorgan Chase had downgraded the stock with a price target of $16.00. The stock has an average rating of Buy and an average target price of $17.14. The valuations are getting a little stretched with a P/E (TTM) of nearly 22. The forward P/E is around 17, and the PEG ratio is 1.71. An article on SA in June had recommended the stock for its excellent performance and strong balance sheet. One of the main reason for the bullish stance of the author was the business model of RPXC. It was mentioned that while RPXC can benefit from the regular cash flow in the form of annual subscriptions, the clients can benefit by reducing costs. Litigation is time consuming and costly. Blue Calypso (BCYP) was recently successful in getting one defendant to settle, but there have been other companies which have not been so lucky. However, the immediate trend of the stock will be determined by the earnings. Exposures to earnings are risky, and one can play based on individual risk appetite.

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