Following the first quarter earnings announcement on April 25,
none of the analysts covering
Citrix Systems Inc.
) have made any revisions to their estimates. The brokers have
retained their estimates based on the belief that all the positive
news has already been incorporated within the stock's
First Quarter Highlights
On a GAAP basis, quarterly net income was $68.3 million or 36
cents per share, compared with $73.5 million or 39 cents per share
in the year-ago quarter. Adjusted EPS of 45 cents was substantially
ahead of the Zacks Consensus Estimate of 39 cents.
Quarterly net revenue of $589.5 million was up 20% year over
year, and easily surpassed the Zacks Consensus Estimate of $562
million. Operating margin was 13.7% compared with 16.5% in the
prior year quarter.
Agreement of Analysts
Of the 13 analysts covering the stock in the last 7 days, none
have revised the estimate for the second quarter of 2012.
Similarly, for the third quarter of 2012, none of the 15 analysts
covering the stock have made any changes to their estimates.
For fiscal 2012, out of the 14 analysts covering the stock in
the last 7 days, none have revised their estimates. The trend is
similar for fiscal 2013 as well, where none of the 15 analysts
covering the stock have revised their estimates.
Currently, the Zacks Consensus Estimate for the second quarter
of fiscal 2012 is 47 cents, with a projected negative growth of
3.61%. For the third quarter of fiscal 2012, the Zacks Consensus
Estimate of 60 cents indicates an annual gain of 23.27%.
Magnitude of Estimate Revisions
During the last 7 days, the current Zacks Consensus Estimates
for the second and third quarter of 2012 has been in line with
previous estimates of 47 and 60 cents respectively. Similarly for
fiscal 2012 and 2013, the current Zacks Consensus Estimates are in
line with previous estimates of $2.30 and
The company has outdone the Zacks Consensus estimates in all of
the four previous quarters. In the first quarter of 2012, Citrix
Systems outpaced the estimate by 6 cents or 15.38%.
The estimate for the ongoing quarter of fiscal 2012 is in line
with the Zacks Consensus estimate, while the estimates for the
third quarter of 2012 contains an upside potential of 1.67%
(essentially a proxy for future earnings surprises). Fiscal 2012
estimates contains an upside potential of 0.44%, while the
estimates for fiscal 2013 are in line with the Zacks Consensus
We believe that Citrix Systems is benefiting from the growth
opportunity in virtualization and cloud computing market as
company's are viewing these as an effective tool to curtail costs.
Desktop virtualization market is expected to touch 100 million
personal computers by 2013, while the web conferencing market size
is likely to touch $4 billion by 2014, acting as a positive
catalyst for the company.
However, the ongoing macroeconomic uncertainty may act as a
headwind for the company as it restricts several firms from their
target IT spending. Additionally, high cost associated with
virtualization may restrict the long term prospect of Citrix.
Finally, increased competition from
) provides certain downside risks for the company.
Considering these factors, we maintain our long-term Neutral
recommendation on Citrix systems. Currently, Citrix Systems has a
Zacks #2 Rank, implying a short-term buy rating on the stock.
About Earnings Estimate Scorecard
As a PhD from MIT, Len Zacks proved over 30 years ago that
earnings estimate revisions are the most powerful force impacting
stock prices. He turned this ground breaking discovery into two
of the most celebrating stock rating systems in use today. The
Zacks Rank for stock trading in a 1 to 3 month time horizon and
the Zacks Recommendation for long-term investing (6+ months).
These "Earnings Estimate Scorecard" articles help analyze the
important aspects of estimate revisions for each stock after
their quarterly earnings announcements. Learn more about earnings
estimates and our proven stock ratings at:
CITRIX SYS INC (CTXS): Free Stock Analysis
VMWARE INC-A (VMW): Free Stock Analysis Report
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