Citrix Systems Inc. ( CTXS )
reported robust financial results for the second quarter of 2012,
surpassing the Zacks Consensus Estimates. We believe global trends
toward virtualization and cloud computing will facilitated Citrix
to report strong results.
The company continues to grow as virtualization and cloud
computing becomes essential for business enterprises to reduce
costs when the economy is yet to completely come out of recession.
We believe business fundamentals of the company remains intriguing
as the virtualization market will continue to flourish in the near
Nevertheless, management has provided a soft guidance for the
ensuing third quarter due to economic sluggishness. However, the
full year 2012 guidance still remains firm.
Citrix's major competitor, VMware Inc. ( VMW )
also provided a rosy outlook for fiscal 2012. Meanwhile, the stock
price has soared nearly 60% in the last year. We, therefore,
downgrade our recommendation on Citrix to Neutral based on its
high-level of current valuation.
Citrix is benefiting from the growing trend toward globalization
and the virtual office. In order to expand further, the business
enterprises continue to explore markets throughout the world.
Virtualization and cloud computing have become one of the most
effective tool of reducing costs as enterprises grow in size.
Instead of installing their own virtualization and data center
set up, the corporate bodies are now sharing cloud computing
platform of dedicated providers like Citrix. As a consequence, the
companies require the IT infrastructure to support this virtual
office. We believe large and medium sized enterprises will
increasingly move toward more dynamic and converged
CITRIX SYS INC (CTXS): Free Stock Analysis
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