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Citrix Analyst: ‘Near-Term Pain For Long-Term Gain’

Courtesy of Benzinga.

Citrix Analyst: 'Near-Term Pain For Long-Term Gain'

Citrix Systems, Inc. (NASDAQ: CTXS) reported second-quarter results that fell notably short of the Street’s estimates, but Wedbush says investors should accept “near-term pain for long-term gains.”

The Analyst

Wedbush’s Daniel Ives maintains a Neutral rating on Citrix Systems with a price target lowered from $100 to $95.

The Thesis

Citrix’s transition to focus on a subscription model is progressing faster than expected across its major business units and this was evident in Wednesday’s earnings report, Ives wrote in a note. Specifically, the company spent the past 18 months transitioning the company to better focus on cloud/subscription. During the second quarter management initially guided for cloud/subscription to represent 52% of the business but the actual number came in at 62%.

Ives said a shift towards a more visible business model is encouraging and the company deserves credit for its execution so far. In fact, the company offered a new metric ARR (annual recurring revenue), which will be a notable measure for the rest of 2019 and into next year to measure further improvements in the transition.

During the second quarter ARR was 33% higher year-over-year at $614 million and SaaS ARR was 50% higher year-over-year at $418 million.

Ives said investors with plenty of patience may benefit from Citrix’s stock as “all the pieces are generally in place” for its cloud transition. However, the near-term picture is clouded with uncertainty in the field.

Price Action

Shares of Citrix were trading lower by more than 5% at $95.63 Thursday afternoon.

Related Links:

Citrix Systems Analysts Have Mixed Response To Q1 Print

Mid-Day Market Update: Dow Down 170 Points; Gemphire Therapeutics Shares Spike Higher

Latest Ratings for CTXS

Date Firm Action From To
Jul 2019 Maintains Underweight
Jun 2019 Upgrades Hold Buy
Jun 2019 Upgrades Hold Buy

View More Analyst Ratings for CTXS


View the Latest Analyst Ratings

Posted-In: cloud Daniel Ives WedbushAnalyst Color Earnings News Price Target Analyst Ratings Best of Benzinga


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