Does Citrix Systems, Inc.'s (NASDAQ:CTXS) Past Performance Indicate A Stronger Future?
When Citrix Systems, Inc. (NasdaqGS:CTXS) released its most recent earnings update (31 December 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Citrix Systems has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see CTXS has performed.
View our latest analysis for Citrix Systems
Could CTXS beat the long-term trend and outperform its industry?
CTXS's trailing twelve-month earnings (from 31 December 2019) of US$682m has jumped 18% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 14%, indicating the rate at which CTXS is growing has accelerated. What's enabled this growth? Well, let’s take a look at whether it is solely a result of industry tailwinds, or if Citrix Systems has seen some company-specific growth.
In terms of returns from investment, Citrix Systems has invested its equity funds well leading to a 81% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 16% exceeds the US Software industry of 6.8%, indicating Citrix Systems has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Citrix Systems’s debt level, has increased over the past 3 years from 19% to 22%.
What does this mean?
Though Citrix Systems's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Citrix Systems to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CTXS’s future growth? Take a look at our free research report of analyst consensus for CTXS’s outlook.
Financial Health: Are CTXS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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