Citrix Systems Inc. Stock Buy Recommendation Reiterated (CTXS)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Citrix Systems (Nasdaq: CTXS) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 19.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CTXS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
  • 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 4.9% when compared to the same quarter one year prior, going from $108.70 million to $114.03 million.
  • Net operating cash flow has increased to $226.72 million or 33.70% when compared to the same quarter last year. In addition, CITRIX SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -24.32%.
  • CITRIX SYSTEMS INC's earnings per share improvement from the most recent quarter was slightly positive. 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 $1.86 versus $1.88 in the prior year. This year, the market expects an improvement in earnings ($3.14 versus $1.86).

Citrix Systems, Inc. designs, develops, and markets technology solutions to deliver IT services on-demand worldwide. Citrix Systems has a market cap of $13.74 billion and is part of the technology sector and computer software & services industry. The company has a P/E ratio of 25.6, above the S&P 500 P/E ratio of 17.7. Shares are up 12.1% year to date as of the close of trading on Wednesday.

You can view the full Citrix Systems Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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