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Will This Price Target Cut Hurt Citrix (CTXS) Stock Today?

Stocks in this article: CTXS

Story updated at 10 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Jefferies lowered its price target for Citrix (CTXS) to $65 from $70 Wednesday, maintaining a "buy" rating.

Citrix fell 0.3% to $56.25 in morning trading.

The lower estimates are due to lukewarm survey results in the mobile and desktop segments. Jefferies analysts also cited competitive and execution issues as reasons for the lower price target.

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Separately, TheStreet Ratings team rates CITRIX SYSTEMS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CITRIX SYSTEMS INC (CTXS) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income increased by 21.6% when compared to the same quarter one year prior, going from $114.03 million to $138.64 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.4%. Since the same quarter one year prior, revenues slightly increased by 8.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CITRIX SYSTEMS INC has improved earnings per share by 23.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CITRIX SYSTEMS INC reported lower earnings of $1.81 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus $1.81).
  • CTXS has underperformed the S&P 500 Index, declining 19.01% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Software industry and the overall market, CITRIX SYSTEMS INC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CTXS Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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