Citrix Systems (CTXS, Financial) is focused on restructuring its operational structure to better implement its growth strategy in the overall organizational model to streamline the decision-making processes and redirect its investments towards the major expansion opportunities. Through this restructuring program, Citrix is forecast to enhance its operational efficiency and planned focus, thus allowing it to achieve annualized pre-tax savings in nearly $90 million to $100 million range.
Product development moves
Citrix is accelerating its pace for innovation implementation, both organically and inorganically during the quarter. For instance, it is recently introducing some unique features for XenApp which should definitely solidify the customer value and enhance the key market opportunities for its service providers and partners. For instance, Citrix is inducing much needed help for remote apps and Linux-based DDI in government and manufacturing sectors, engineering and customer segments. Citrix is also launching HDX screen recording to strengthen linked security for healthcare, government and banking apps.
The key operational restructuring and significant implementation of innovation by Citrix is believed to optimize the company’s cost structure and thus allow it to strategically allocate its spending across the key innovations executed.
Strategic initiatives
Citrix is focused on successfully executing the strategic integration of its mobility apps, workspace services and delivery networking solutions to allow for a software-defined workplace. Going forward into 2015, Citrix is keen on delivering a wide organizational footprint to enable profitable growth, enhanced security to its customers with greater flexibility and an overwhelming customer experience.
By the concluding year 2014, Citrix collected 26.1 million shares comprising of 21.8 million linked to its accelerated share repurchase program and 4.3 million shares from other key repurchases costing approximately $64.00 per share on an average.
The solid strategy of Citrix to consolidate its different organizational processes for developing a software-defined workplace coupled with exciting the customers with innovatively defined solutions is estimated to drive significant customer traction for its key solutions and enable improved company profitability. The extensive share repurchase program also signifies the robustness of the company’s balance sheet with a sharp focus on delivering enhanced shareholder value.
Citrix lately launched the innovative Citrix Workspace Suite. This Citrix Workspace comprises integrated solutions for its customers offering data, desktops, apps and services under a single licensing structure. This solution is primarily crafted by the company for large and mid-size markets and worldwide enterprises. The unique solution is believed to provide the company with a competitive edge over its peers and allow it to better penetrate the global markets.
Citrix is bound to gain this fiscal year from its strategic launch of Version 7.6 of XenDesktop and XenApp. These innovatively developed versions are forecast to enhance the overall user experience providing excellent security and performance improvement. In addition, Citrix has designed migration tools that are believed to simplify its customer’s transition of XenDesktop and XenApp to window server 2012 and allow for enhanced and unique windows apps as the exceeded service experience.
The new Citrix Workspace Suite along with the introduction of newer version 7.6 of XenApp and XenDesktop is estimated to increasingly popularize Citrix as a reliable and security-focused brand among the key enterprise customers driving excellent top line and bottom line growth for the company along with improved shareholder returns.
Moreover, the XenMobile 9 product of Citrix is driving significant market traction. There’s an expanding global adoption of XenMobile 9 which should significantly increase its performance moving ahead. XenMobile 9 also has a guardian feature and an online support service for the key mobile users developed on Citrix platform which is estimated to drive greater customer traction and enhance the company sales in the years to come. XenMobile 9 even provides a competitive advantage to Citrix in the growing market.
In addition, Citrix is expanding its networking segment with improved end-market partnerships, better OEM products and through superior technical consolidation. The technology major is further expanding its market capacity by launching improved networking center channels, allowing the company to launch its innovative products at an accelerated pace in the market and thus clearing its inventory faster. There’s an expanding growth opportunity for its NetScaler product in carrier networks which is expected to improve the company’s prospective delivery network product line.
The newly developed XenMobile 9 product along with strategic development of end-market partnerships is believed to significantly expand the end-user traction for its products in several other unexplored markets.
Moreover, Citrix is also witnessing significant customer traction for its Share File product line in the legal, medical and finance domains. There’s an accelerated market share expansion in the enterprise markets as well. Also, Citrix has consolidated its Share File concept with its work apps and its XenMobile which is expected expand the company sales in the forthcoming quarters. Further, Citrix is recording solid adoption of its Share File in the Small and Medium-sized businesses for EMEA regions which would definitely enhance its sales. Additionally, Citrix has partnered with right signature that widens its growth potentials by developing unique professional electronic document signing technology that is estimated to save time and money by converting the legally binding paper documents in electronic form.
The consensus estimate among 45 polled investment analysts evaluating Citrix Systems, Inc. suggests that the company should outperform the market. This rating is held constant since the investment analyst’s sentiments improved on Oct. 18, 2010. The earlier consensus estimate suggested investors to hold their position in the company.
Citrix recently acquired Sanbolic which added storage virtualization technology to its already robust technology portfolio. Primarily, Sanbolic adds superior-performance, unhindered accessibility, easier configuration and lesser cost to Workspace Suite, Citrix DDI and Windows App delivery solutions.
Conclusion
Overall, investors are advised to invest in Citrix Systems, Inc. looking at logical valuation levels of the company with trailing P/E and forward P/E ratios of 40.66 and 14.76 respectively. The PEG ratio of 1.29 is better than the industry’s average of 1.84, suggesting better company growth. The profit margin of 8.01% is satisfactory. Citrix just needs to optimize its debt-laden balance sheet with total debt of huge $1.29 billion against total cash of $789.41 million only to support the company’s future investment opportunities.
