Citrix Systems, Inc.
), a leading provider of virtualization, networking and cloud
computing solutions in the U.S., is slated to report its
second-quarter 2014 financial numbers on July 23, 2014, after the
In the previous quarter, Citrix reported a positive earnings
surprise of 31.6%. Moreover, the company has outpaced the Zacks
Consensus Estimate in all of the past four quarters with an average
beat of 13.6%. Let's see how things are shaping up for this
Factors to Influence This Quarter
We believe that the shift in global trend toward virtualization
and cloud computing will help Citrix maintain its favourable
momentum over the coming quarters. Banking on these positives, the
company raised its guidance for the second quarter as well as for
fiscal 2014 on May 5, 2014.
In the first quarter of 2014, the company had achieved revenue
growth across all its segments. Even outside the U.S., it continues
to maintain strong revenue expansion. As a result, Citrix expects
revenues to remain in the range of $765-$775 million in the second
quarter, with an increase of 8.5% to 10% for the full year.
Citrix provides software and equipment for streamlining business
computer systems. The demand for its products and services depends
substantially upon the general demand for business-related computer
appliances and software. Fluctuations in the demand for these
products and services could lead to an adverse effect on the
company's business, operational results and financials.
Our proven model does not conclusively show that Citrix Systems
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here, as you will see below.
Zero Zacks ESP
: The Earnings ESP is 0.00%. This is because both the Most Accurate
estimate and the Zacks Consensus Estimate are poised at 41
: Citrix Systems carries a Zacks Rank #3 (Hold) which when combined
with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies in the Business Software &
Services industry for investors to consider, that, according to our
model have the right combination of elements to post an earnings
beat this quarter:
Silicon Motion Technology Corp.
), with earnings ESP of +33.33% and a Zacks Rank #1 (Strong
F5 Networks, Inc.
), with earnings ESP of +3.8% and a Zacks Rank #2 (Buy).
Iron Mountain Inc.
), with earnings ESP of +13.89% and a Zacks Rank #2 (Buy).
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