Citrix Systems Remains Neutral - Analyst Blog
October 03 2011 - 10:29AM
Zacks
Citrix Systems Inc. (CTXS) declared strong
financial results for the second quarter of 2011, beating the Zacks
Consensus Estimates. Global trends toward virtualization and cloud
computing are facilitating Citrix to report impressive results.
Management raised its financial forecast for full-year 2011. As
a leading provider of enterprise software with desktop
virtualization at its core, the company will benefit from the
latest trend of globalization.
We believe the virtualization market will flourish in the near
future with desktop virtualization as its central point. Moreover,
the company’s major products such as XenDesktop, NetScaler, and
Online Collaboration are generating huge revenue.
Citrix recently completed the acquisition of Cloud.com Inc., a
leading developer of software infrastructure platform for cloud
computing service providers. The CloudStack product suite of
Cloud.com offers an open-source platform-as-a-serviceenvironment
that enables the cloud service providers to deploy and manage
scalable applications in simplistic and cost-effective way.
With Cloud.com in its kitty, Citrix is now comfortably placed at
par with cloud computing software leader VMware
Inc. (VMW). The company became a strong challenger for
Amazon.com Inc.’s (AMZN) web services software and
Microsoft Corp.’s (MSFT) Windows Azure software.
Cloud.com has a solid list of clientele including Tata
Communications Ltd. (TCL), KT Corp. (KT),
Apple Inc. (AAPL), Nokia Corp.
(NOK), Zynga Inc., GoDaddy.Inc., to name a few.
Nevertheless, ongoing global macro-economic fluctuations may
hinder the recovery process of IT spending by several enterprises.
Recent debt crisis in the U.S. and various European countries has
slowed the momentum of economic recovery from recession.
We are still not out of the woods. This may make Citirix’s
near-term financials volatile. We believe the company is fairly
valued at present and thus reiterate our long-term Neutral
recommendation on Citrix Systems.
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