Earnings Beat: Citrix Systems, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
A week ago, Citrix Systems, Inc. (NASDAQ:CTXS) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 17% higher thanthe analysts had forecast, at US$861m, while EPS were US$1.42 beating analyst models by 100%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Citrix Systems
Taking into account the latest results, Citrix Systems' 17 analysts currently expect revenues in 2020 to be US$3.18b, approximately in line with the last 12 months. Statutory earnings per share are expected to crater 33% to US$3.97 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.12b and earnings per share (EPS) of US$3.40 in 2020. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice gain to earnings per share in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$151 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Citrix Systems at US$200 per share, while the most bearish prices it at US$125. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Citrix Systems shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Citrix Systems' past performance and to peers in the same industry. From these estimates it looks as though the analysts expect the years of declining sales to come to an end, given the flat revenue forecast for next year. That would be a definite improvement, given that the past five years have seen sales shrink five years annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. Although Citrix Systems' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Citrix Systems following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Citrix Systems analysts - going out to 2022, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Citrix Systems that we have uncovered.
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