Risk, Reward Balance Citrix Systems - Analyst Blog


We reaffirm our long-term Neutral recommendation on Citrix Systems Inc. ( CTXS ). The company posted mixed financial results for the first quarter of 2013. While net income marginally surpassed the Zacks Consensus Estimate, revenues fell below the same.

Why Kept at Neutral?

The global economy is still suffering from fluctuations and we are not completely out of the woods. Various geo-political concerns in the European and African countries have slowed the momentum of economic recovery. This may make Citrix's near-term financials volatile. Management provided a weak financial outlook.The company cited reduction in IT spending and delay of orders as the primary reasons for this tepid guidance.

Nevertheless, we believe that the global trend toward virtualization and cloud computing will facilitate Citrix to keep up its momentum in the long term. In our view, business fundamentals of the company remain intriguing as the corporate spending for IT is expected to rise globally in the future. The newly-launched XenMobile is gaining market traction in the highly lucrative enterprise mobility segment.

Citrix is concentrating on three broad markets: Desktop virtualization, Cloud Infrastructure and networking, and Collaboration and sharing. As desktop virtualization has become the top priority for any IT set-up, Citrix is continuously introducing newer innovative products that will facilitate business flexibility, security and centralized management system.

Meanwhile, the stock price has plummeted 28.5% in the last year. We believe that Citrix is currently fairly valued. Citrix is also taking several steps to expand globally and launch various state-of-the-art products.

Other Stocks to Consider

Citrix Systems currently has a Zacks Rank #3 (Hold). Other stocks in this industry worth a look are Aspen Technology Inc. ( AZPN ), SAP AG ( SAP ) and Pegasystems Inc. ( PEGA ). All these stocks currently have a Zacks Rank #1 (Strong Buy).

ASPEN TECH INC (AZPN): Free Stock Analysis Report

CITRIX SYS INC (CTXS): Free Stock Analysis Report

PEGASYSTEMS INC (PEGA): Free Stock Analysis Report

SAP AG ADR (SAP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AZPN , CTXS , PEGA , SAP



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