February 13, 2018

CTXS – Considering management’s positive sentiment regarding integrations, win rate, and their restructuring, as well as overly bearish market expectations, longer-term upside remains warranted


    • Citrix System, Inc. (CTXS:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 21.8x Uniform P/E. At these levels, markets are pricing in overly-bearish expectations for the firm, and longer-term outperformance would therefore be justified should CTXS just maintain profitability at current levels. Considering management’s positive sentiment regarding integrations, win rate, and their restructuring, this scenario is likely
    • Specifically, management is confident in their integrations with Azure and Intune at the platform level and Office 365 at an app level being key decision points, and in the fact that they have built up a little over $60mn in subscriptions that are off balance sheet. Additionally, they are confident that their win rates have been up about 400bps in H2 2017 versus H1 2017, and that the level of granularity they are providing will help everybody understand how their business is building up. Furthermore, they are confident that their restructuring over H2 2017 will help them effectively rebalance talent and skill sets, and that they will power through their ASR balance of $2bn over the course of this year
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