Citrix Shares Decline 5% After Lower Earnings, Price-Target Decreases

   By Dave Sebastian

Shares of Citrix Systems Inc. (CTXS) declined more than 5% Thursday after the cloud-software company reported lower second-quarter earnings that missed analysts' estimates.

The company posted a net income of $93.5 million, or 70 cents a share, compared with $106.8 million, or 73 cents a share, in the prior year.

Morgan Stanley on Thursday decreased Citrix's price target to $95 from $102, though it maintained its rating at underweight.

As the company transitions to a subscription-based model, Morgan Stanley analysts said in a note that there is less visibility in growth and margin, and free cash flow becomes less clear.

Analysts at Wedbush Securities said in a note Thursday that Citrix's shift to the subscription-based model presents an opportunity for longer-term gains.

"In our longer term view, while the model transition will take time and patience from investors on this name, we believe all the pieces are generally in place for this cloud transition to manifest along with modestly improving demand environment which gives us some confidence on the name going forward," said the analysts, who decreased Citrix's price target to $95 from $100.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

July 25, 2019 12:13 ET (16:13 GMT)

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