Trade-Ideas: Citrix Systems (CTXS) Is Today's

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 "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) 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 $102.6 million.
  • CTXS has traded 557,772 shares today.
  • CTXS is trading at 3.79 times the normal volume for the stock at this time of day.
  • CTXS crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 36.4. Currently there are 11 analysts that rate Citrix Systems a buy, 1 analyst rates it a sell, and 13 rate it a hold.

The average volume for Citrix Systems has been 2.1 million shares per day over the past 30 days. Citrix Systems has a market cap of $9.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.88 and a short float of 2.7% with 3.09 days to cover. Shares are down 3.2% 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 hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • CTXS's revenue growth trails the industry average of 27.3%. Since the same quarter one year prior, revenues slightly increased by 6.5%. 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.
  • 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 0.83 is weak.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 38.0% when compared to the same quarter one year ago, falling from $76.73 million to $47.53 million.
  • Net operating cash flow has decreased to $164.13 million or 26.38% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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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