Citrix Systems, Inc.

CTXS Details

Citrix Systems, Inc. (NASDAQ: CTXS) makes virtualization software such Virtual Apps and Desktops and Citrix Virtual Apps for desktop virtualization and application virtualization, respectively. It sells and licenses its products through various channels worldwide, including resellers and direct sales over the Internet. CTXS also offers Citrix Endpoint Management for mobile device management, Citrix ADC for application delivery, and Citrix SDWAN for routing, security, and WAN monitoring.

Latest News:

• Strengthening Partnerships: CTXS and Nexthink, the pioneer in Digital Employee Experience (DEX) management software, launched the next phase of their collaboration on November 16, 2021. Combining their efforts to provide enterprises with a single perspective for end-to-end visibility of employees' digital interactions for customers using CTXS' secure remote work solutions, both companies are doubling down on the hybrid nature of work and the enhanced security it necessitates. Further, on November 09, 2021, Nilkamal Limited, a pioneer in manufacturing moulded furniture and material handling equipment, resorted to CTXS for its Virtual Apps and Desktops to meet its current needs but also to match with future demands and to evolve workplace dynamics.

9MFY21 Results:

• Slight fall in Topline: The company's total net revenues declined 2.50% during 9MFY21 (ended September 30, 2021) to USD 2.37 billion from USD 2.43 billion during 9MFY20, due to a decline in sales of its perpetual Workspace solutions and its maintenance services.
• Decline in Bottomline: The net income during 9MFY21 was USD 204.60 million vs. USD 392.36 million reported during 9MFY20.
• Leveraged Balance Sheet: As of September 30, 2021, the company's cash and cash equivalents (including short term investments) stood at USD 449.67 million, with a total debt of USD 3.33 billion.

Key Risks:

• Reliance on Third-Party Suppliers: CTXS relies on a small number of third-party suppliers and contract manufacturers to provide hardware or hardware components for its App Delivery and Security solutions. As a result, these suppliers' inability to provide these essential items could impact the company's operations and financial situation.

Outlook:

• Q4FY21 Estimates: CTXS forecasts sales in the Q4FY21 to be between USD 825-835 million. It also expects GAAP diluted EPS to be in the range of USD 0.19 to 0.25 and non-GAAP diluted EPS to be in the range of USD 1.04 to 1.09.
• FY21 Estimates: As on November 04, 2021, CTXS indicated its FY21 revenue guidance to be around USD 3.19-3.20 billion and expected its GAAP operating margin to be approximately 10%. CTXS further anticipates its GAAP diluted EPS to range between USD 1.81 – 1.87, along with a non-GAAP diluted EPS around USD 4.90 – 4.95.

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.