Polycom Reports Solid December Quarter

Citigroup has published a research report on Polycom, Inc. (NASDAQ: PLCM) after the company reported stronger than expected December quarter earnings results.

In the report, Citigroup writes "We are impressed with Polycom's revenue growth and margin expansion potential but with the stock trading at 17.4x CY11 EPS estimates (ex cash), we believe these positives are priced into the current share price. Competitive intensity remains a concern in the quarters ahead, given the onslaught of competing vendors (Lifesize, Vidyo, Teliris, Huawei etc), that could potentially cap margin expansion trajectory. We may revisit our investment thesis on PLCM based on any meaningful weakness in its share price or the opportunity to outperform our expectations for organic revenue growth and margin expansion. We are raising our 2012 EPS to $2.63 from $2.48 on a flowthrough of higher revenues."

Citigroup maintains its Hold rating and has raised the price target from $35 to $43.

Polycom, Inc. closed yesterday at $38.18.