Citrix Upgraded to Outperform - Analyst Blog
June 01 2011 - 6:15AM
Zacks
We upgrade our recommendation on
Citrix Systems Inc. (CTXS) to Outperform backed by
its excellent performance in first-quarter 2011. The company is
growing gradually as virtualization and cloud computing becomes
essential for large enterprises to reduce costs when the economy
begins to recover from recession. As a leading provider of
enterprise software with desktop virtualization at its core, Citrix
will benefit from the increasing trend of globalization.
Management raised its financial
forecast for full fiscal 2011. We believe the virtualization market
will flourish in the near future with desktop virtualization as its
central point. The company’s major products such as XenDesktop,
NetScaler, and Online Collaboration are generating huge revenue. As
enterprises throughout the world are rapidly moving into
virtualized environment, Citrix is witnessing massive demand for
either new licensing or system upgrade contract.
In the previous quarter, in the
desktop virtualization segment, 8 of the 14 deals exceeding $1
million include XenDesktop licenses. More than 2,000 customers
purchased XenDesktop solutions in the first quarter, of which 83
transactions were for more than 1,000 seats and 17 transactions
were for more than 5,000 seats. We believe Citrix can also
capitalize on the growing demand for mobile computing since its
software enables customers to remotely log in to desktops.
Citrix Competes with VMware
Inc. (VMW) and Red Hat Inc. (RHT). Citrix
has a very healthy liquidity position. At the end of the first
quarter of 2011, the company had above $1,638.8 million of cash and
marketable securities. Balance sheet remains free of any debt
obligations. Furthermore, the board of directors of Citrix has
enhanced its share repurchase program by $500 million.
CITRIX SYS INC (CTXS): Free Stock Analysis Report
RED HAT INC (RHT): Free Stock Analysis Report
VMWARE INC-A (VMW): Free Stock Analysis Report
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