Forgent (NASDAQ:FORG)
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Dutton Associates updates its coverage of Forgent Networks
(Nasdaq:FORG), maintaining a Strong Buy rating but lowering its target
price to $2.00 price target. The 13-page report by Dutton senior analyst
Richard West, CFA is available at www.jmdutton.com
as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and
other leading financial portals.
Forgent Networks, Inc.’s (Forgent) aggressive
and, in the past, successful program of licensing its intellectual
property generated revenue over $115.0 million in license fees in the
past four-and-a-half years, from licensing its U.S. Patent No. 4,698,672
(‘672 Patent) to 60 companies. However,
since our May 18, 2006 Research Report, Forgent experienced some
negative events that have severely affected its fortunes. We discuss
these events in our report. In response to Judge Fogel’s
Markman Hearing ruling, Forgent’s common stock
fell from the $1.20 per share level and has been selling in the $0.36 to
$0.53 range. At these levels, Forgent is being valued at approximately
$10.0 million, which is less than the cash on the balance sheet as of
April 30, 2006. We believe the current low valuation more than discounts
the past negatives and does not take into account the possibility of
Forgent going forward to a jury trial for the ‘672
Patent or arriving at a negotiated settlement. Also, the current low
valuation appears to ignore the possibility involved in the ‘746
Patent litigation. We reiterate our Strong Speculative Buy rating but,
due to the unresolved issues, are lowering our 12-month price target to
$2.00 per share.
About Dutton Associates
Dutton Associates is one of the largest independent investment research
firms in the U.S. Its 31 senior analysts are primarily CFAs®,
and have expertise in many industries. Dutton Associates provides
continuing analyst coverage of over 140 enrolled companies, and its
research, estimates, and ratings are carried in all the major databases
serving institutions and online investors.
The cost of enrollment in our one-year continuing research program is US
$39,500 prepaid for 4 Research Reports, typically published quarterly,
and requisite Research Notes. We received $63,000 from the Company for 7
quarterly Research Reports with coverage commencing on 12/21/2004. The
Firm does not accept any equity compensation. Our principals and
analysts are prohibited from owning or trading in securities of covered
companies. The views expressed in this research report accurately
reflect the analyst's personal views about the subject securities or
issuer. Neither the analyst's compensation nor the compensation received
by us is in any way related to the specific ratings or views contained
in this research report or note. Please read full disclosures and
analyst background at www.jmdutton.com
before investing.
Dutton Associates updates its coverage of Forgent Networks
(Nasdaq:FORG), maintaining a Strong Buy rating but lowering its target
price to $2.00 price target. The 13-page report by Dutton senior
analyst Richard West, CFA is available at www.jmdutton.com as well as
from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading
financial portals.
Forgent Networks, Inc.'s (Forgent) aggressive and, in the past,
successful program of licensing its intellectual property generated
revenue over $115.0 million in license fees in the past
four-and-a-half years, from licensing its U.S. Patent No. 4,698,672
('672 Patent) to 60 companies. However, since our May 18, 2006
Research Report, Forgent experienced some negative events that have
severely affected its fortunes. We discuss these events in our report.
In response to Judge Fogel's Markman Hearing ruling, Forgent's common
stock fell from the $1.20 per share level and has been selling in the
$0.36 to $0.53 range. At these levels, Forgent is being valued at
approximately $10.0 million, which is less than the cash on the
balance sheet as of April 30, 2006. We believe the current low
valuation more than discounts the past negatives and does not take
into account the possibility of Forgent going forward to a jury trial
for the '672 Patent or arriving at a negotiated settlement. Also, the
current low valuation appears to ignore the possibility involved in
the '746 Patent litigation. We reiterate our Strong Speculative Buy
rating but, due to the unresolved issues, are lowering our 12-month
price target to $2.00 per share.
About Dutton Associates
Dutton Associates is one of the largest independent investment
research firms in the U.S. Its 31 senior analysts are primarily
CFAs(R), and have expertise in many industries. Dutton Associates
provides continuing analyst coverage of over 140 enrolled companies,
and its research, estimates, and ratings are carried in all the major
databases serving institutions and online investors.
The cost of enrollment in our one-year continuing research program
is US $39,500 prepaid for 4 Research Reports, typically published
quarterly, and requisite Research Notes. We received $63,000 from the
Company for 7 quarterly Research Reports with coverage commencing on
12/21/2004. The Firm does not accept any equity compensation. Our
principals and analysts are prohibited from owning or trading in
securities of covered companies. The views expressed in this research
report accurately reflect the analyst's personal views about the
subject securities or issuer. Neither the analyst's compensation nor
the compensation received by us is in any way related to the specific
ratings or views contained in this research report or note. Please
read full disclosures and analyst background at www.jmdutton.com
before investing.