The stock’s trailing five-year valuation metrics suggest that the stock is overvalued as all three of the metrics are above their respective five-year averages. Citrix’s current P/B ratio is 4.8 and it has averaged 3.7 over the past five years with a high of 5.7 and low of 2.1. Citrix’s current P/S ratio is 6.0 and it has averaged 4.9 over the past five years with a high of 7.4 and low of 2.6. Citrix’s current P/E ratio is 37.4 and it has averaged 35.9 over the past five years with a high of 47.7 and low of 24.6.
On a forward P/E basis, there is a bit of a different conclusion. Citrix is trading at about $68 a share with analysts expecting EPS of $2.79 next year for a forward P/E of 24. Revenues are expected to jump 13%. According to Yahoo Finance, competitors include Cisco (CSCO) and Vmware (VMW). Cisco is trading at about $20 a share with analysts expecting EPS of $1.77 in the fiscal year ending in July for a forward P/E of 11 with revenues expected to increase 6%. Vmware is trading at $92 a share with analysts expecting EPS of $2.58 in 2012 for a forward P/E of 36 and revenues expected to jump 21%. This metric suggests that Citrix is trading at fair value as its multiple and growth rate fits right in between Vmware and Cisco.
On a cash flow basis, according to the Dividend Kings Fair Value metric, the stock is fairly valued as the website suggests that the stock is worth $70 a share versus its current $68 price.
Analysts agree that the stock is close to fair value. The consensus price target for the analysts who follow Citrix is $85. That is upside of 25% and suggests that the stock is fairly valued because the upside is pretty average compared to other analysts’ targets.
Analysts do not have any extra insight into the company. The company has beat EPS estimates the past four quarters with margins ranging between 2-8 cents. This suggests that analysts are not very comfortable projecting the company’s results and upside beats may be in the future for Citrix.
Looking at the chart, Citrix has had an up and down year, rallying over 40% in the beginning part of the year from $62 a share to over $87 a share. Then the stock tumbled, falling over 40% to $50 a share before finding support. The stock is currently trading at about the $68 level. The stock is above its 50 day moving average, which is just below 67, but below its 200 day moving average, which is at about $69. Support on the downside included $65 followed by $62. On the upside, resistance included $72 followed by $77.
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