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Last week, you might have seen that Citrix Systems, Inc. (NASDAQ:CTXS) released its annual result to the market. The early response was not positive, with shares down 4.0% to US$127 in the past week. Citrix Systems reported US$3.2b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$4.00 beat expectations, being 2.6% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Citrix Systems' twelve analysts are now forecasting revenues of US$3.36b in 2021. This would be a credible 3.8% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to rise 3.2% to US$4.13. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.33b and earnings per share (EPS) of US$4.06 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$159, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Citrix Systems analyst has a price target of US$206 per share, while the most pessimistic values it at US$140. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Citrix Systems' growth to accelerate, with the forecast 3.8% growth ranking favourably alongside historical growth of 2.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Citrix Systems is expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Citrix Systems' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$159, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Citrix Systems analysts - going out to 2023, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Citrix Systems that you need to take into consideration.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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