There has always been plenty to like with Citrix's business but I believe the stock has been priced for perfection, which introduced plenty of risk. But Citrix hasn't been alone in this.
The Street has always had a love affair with companies having anything to do with the "cloud." VMware (VMW) and Red Hat (RHT), which have enjoyed above-average multiples and P/Es of 45 and 53, respectively, are perfect examples. Unfortunately, the growth expectations presumed by these valuations have not manifested into results.
In the case of Citrix, which has established itself as the go-to vendor for IT virtualization services and remote desktop technology, the company is rethinking its approach because enterprises are delaying system upgrades. Now, given VMware's relative performance, I do believe Citrix's struggle is more market-related than, say, a lack of execution. The dismal numbers we've seen from enterprise titans IBM (IBM) and Oracle (ORCL) supports this theory.
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