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Citrix Systems Inc CTXS

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Citrix Misses on Burst Licensing Renewals and Hardware Component Shortages; FVE Down to $149

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Narrow-moat Citrix Systems reported weaker-than-expected results on headline numbers. In an absolute sense, guidance was raised for the year, with Wrike adding more to the top line than component shortages detracted. That said, the outlook includes lower profitability based on dilution from Wrike. Given management’s recent track record of reporting quarterly upside to guidance, we believe the outlook would err on the side of caution. That said, we note the disconnect between management’s expectations on converting burst licenses from the first quarter in 2020 and the struggle to execute on those companies that are still sorting out their long-term IT plans. We remain generally in line with management’s long-term financial targets and think revenue should accelerate throughout 2021, consistent with management commentary. That said, COVID-19, the transition to the cloud, and the addition of Wrike make modelling challenging through 2021. We are lowering our fair value estimate to $149 per share from $154 based on a lower near-term profitability outlook, but we still see the stock as undervalued.

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Company Profile

Business Description

Citrix Systems provides virtualization software, including Virtual Apps and Desktops for desktop virtualization and Citrix Virtual Apps for application virtualization. The company also provides Citrix Endpoint Management for mobile device management and Citrix ADC for application delivery and Citrix SDWAN for routing, security, and WAN monitoring.

851 West Cypress Creek Road
Fort Lauderdale, FL, 33309
T +1 954 267-3000
Sector Technology
Industry Software - Application
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Classic Growth
Employees 9,000