Skip to Content

Citrix Systems Inc CTXS

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Citrix Misses Again and Reduces Guidance Based on Sales Execution Challenges; FVE Down to $125

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Narrow-moat Citrix Systems reported mixed second-quarter results, including weaker-than-expected revenue and slightly better EPS. It also issued guidance for the third quarter that was well below expectations and lowered its full-year outlook on headline measures based on sales execution issues. Management was quick to say that demand was solid and pointed to annual recurring revenue. But it also noted that the acceleration of cloud adoption was causing problems with sales execution, which is primarily related to a lack of an overall go-to-market focus and forecasting. We have seen cloud transitions experience faster-than-expected cloud adoption in the past, so this should not be a huge surprise. However, in this case, we think the combination of a miss last quarter, the miss this quarter, a large acquisition (which triggered activist investors in the past), and a less-than-clear explanation of the sales execution issue on the call have conspired to drive a sell-off that is as punitive as it is fundamental. We are lowering our fair value estimate to $125 per share from $149 based on an accelerated transition to software as a service, which we expect to hurt overall growth and margins over the next several years. In short, we have less confidence in the medium term.

Read Full Analysis

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.

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

Related

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.