It's been a sad week for Citrix Systems, Inc. (NASDAQ:CTXS), who've watched their investment drop 11% to US$123 in the week since the company reported its quarterly result. It looks like a credible result overall - although revenues of US$767m were what the analysts expected, Citrix Systems surprised by delivering a (statutory) profit of US$0.78 per share, an impressive 21% above what was forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Citrix Systems' 15 analysts are now forecasting revenues of US$3.32b in 2021. This would be a satisfactory 3.7% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to dive 34% to US$4.00 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.27b and earnings per share (EPS) of US$3.79 in 2021. So the consensus seems to have become somewhat more optimistic on Citrix Systems' earnings potential following these results.
The consensus price target was unchanged at US$158, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Citrix Systems analyst has a price target of US$205 per share, while the most pessimistic values it at US$139. 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.
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. It's clear from the latest estimates that Citrix Systems' rate of growth is expected to accelerate meaningfully, with the forecast 3.7% revenue growth noticeably faster than its historical growth of 1.2%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 13% next 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 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, 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$158, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Citrix Systems. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Citrix Systems going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example - Citrix Systems has 2 warning signs we think you should be aware of.
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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