Foolish Forecast: Will the Market Jump When Tibco Squeaks?

Business-management software maker Tibco Software (Nasdaq: TIBX  ) will report third-quarter earnings on Thursday night. This is a mouse nipping at the heels of elephants -- let's see if the pachyderms should be scared!

What Fools say:

Tibco is rated a meek three stars in CAPS today, after sniffing around the four-star level for a while. So far, 136 Fools have contributed to the grade.

Here's how Tibco's CAPS score rates against some of its peers and competitors:

	(billions)	CAPS Rating (out of 5)	Bull Ratio
Tibco	$1.5	***	94%
Microsoft (NASDAQ:MSFT)	$277.2	**	82%
Oracle (NASDAQ:ORCL)	$112.2	****	91%
IBM (:IBM)	$158.5	***	86%
BEA Systems (NASDAQ:BEAS)	$5.2	***	92%
Progress Software (NASDAQ:PRGS)	$1.3	*****	95%

Data from Motley Fool CAPS as of Sept. 26.

Among the full-text commentaries on Tibco, I can't find a single negative opinion. The company has no critics brave enough to share their research with us.

The bulls are vociferous, though. Your fellow Fools like to call it a buyout target, thanks to its portfolio of award-winning software and solid management.

What management does:
The second-quarter report was a disappointment, and Tibco stock trades some 16% lower today than it did three months ago. You can see it in the sharp downtick in the latest margins, the revenue parade taking a break, and trailing earnings that beat a retreat for the first time in many months.

Margin	2/2006	5/2006	9/2006	11/2006	2/2007	5/2007
Gross	71.7%	72.7%	73.0%	74.2%	74.3%	73.9%
Operating	12.3%	13.5%	13.4%	13.8%	14.1%	13.2%
Net	14.9%	14.8%	13.8%	14.1%	14.7%	11.6%
FCF/Revenue	16.3%	13.6%	19.2%	18.0%	19.8%	18.3%

Growth (YOY)	2/2006	5/2006	9/2006	11/2006	2/2007	5/2007
Revenue	9.4%	8.9%	12.2%	16.0%	15.8%	12.9%
Earnings	44.9%	19.7%	5.8%	0.4%	14.6%	(11.5%)

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
It's easy to overlook the fact that the tax man did most of the bottom-line damage last quarter. Tibco got a one-time tax break in the second quarter of 2006, making year-ago comparisons look bad when that benefit wasn't renewed.

That's hardly an operational hiccup, and the stock has been unfairly punished, in my opinion. Tibco remains a brilliant little rodent that drives the big boys up the wall when it snags accolades left and right, but the mouse has yet to do any real damage in the middleware market. Maybe we should think about snagging a few cheap shares today, before Tibco gets the kwan it deserves. I mean love, respect, community ... and the dollars, too. The whole package. The kwan.