Strong And Under The Radar Today: Citrix Systems (CTXS)

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.

Trade-Ideas LLC identified Citrix Systems ( CTXS) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Citrix Systems as such a stock due to the following factors:

  • CTXS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $112.1 million.
  • CTXS is making at least a new 3-day high.
  • CTXS has a PE ratio of 40.6.
  • CTXS is mentioned 1.65 times per day on StockTwits.
  • CTXS has not yet been mentioned on StockTwits today.
  • CTXS is currently in the upper 20% of its 1-year range.
  • CTXS is in the upper 35% of its 20-day range.
  • CTXS is in the upper 45% of its 5-day range.
  • CTXS is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on CTXS:

Citrix Systems, Inc. provides virtualization, networking, and cloud infrastructure solutions worldwide. The company operates in two divisions, Enterprise and Service Provider, and SaaS division. CTXS has a PE ratio of 40.6. Currently there are 12 analysts that rate Citrix Systems a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for Citrix Systems has been 2.2 million shares per day over the past 30 days. Citrix Systems has a market cap of $11.7 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 2.19 and a short float of 11.1% with 7.62 days to cover. Shares are up 13.3% year-to-date as of the close of trading on Wednesday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Citrix Systems as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Software industry and the overall market on the basis of return on equity, CITRIX SYSTEMS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for CITRIX SYSTEMS INC is currently very high, coming in at 88.88%. Regardless of CTXS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CTXS's net profit margin of 6.78% is significantly lower than the industry average.
  • CTXS's debt-to-equity ratio of 0.61 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.90 is weak.
  • CITRIX SYSTEMS INC's earnings per share declined by 8.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over 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 ($3.23 versus $1.81).

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

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