EL DORADO HILLS, Calif., Oct 10, 2006 (BUSINESS WIRE) -- 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.
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SOURCE: Forgent Networks
John M. Dutton, 916/941-8119