EL DORADO HILLS, Calif., May 18, 2006 (BUSINESS WIRE) -- Dutton Associates updates its coverage of Forgent Networks (Nasdaq:FORG), maintaining a Strong Buy rating and a $5.00 price target. The 12-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.
At current price levels, we believe an investment in Forgent presents minimal downside risk and a most attractive upside potential. Forgent Networks, Inc.'s aggressive and, thus far, successful program of licensing its intellectual property continues to result in the licensing of additional companies for its United States Patent No. 4,698,672 (672), with Forgent having licensed the '672 Patent to 56 companies that include a wide variety of businesses, and recorded revenue of over $106.8 million in license fees. We discuss Forgent's Markman hearing for the '672 Patent litigation and the Markman hearing for the '746 Patent litigation now scheduled for July 2006. Considering the possible additional royalty fees that Forgent may receive before the trial dates in the coming quarters, and assuming a possible judgment of $100.0 to $200.0 million from the '672 Patent litigation, and a possible judgment of $50.0 million to $100.0 million from the '746 Patent litigation, we believe that our price target of $5.00 per share or a market valuation of $125.0 million, is a conservative target. At current price levels, with a market capitalization of approximately $34.5 million, we believe an investment in Forgent presents minimal downside risk and a most attractive upside potential. We reiterate our Strong Buy rating and our 12-month price target of $5.00 per share.
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SOURCE: Forgent Networks
John M. Dutton, 916-941-8119