Recently, the Portfolio for Responsible Investments under Student Management (PRISM) Club recently acquired 100 shares of cloud computing company, Citrix Systems Inc. (NASDAQ:CTXS). In its most recent earnings release, Citrix Systems describes itself as: a cloud company that enables mobile work styles, empowering people to work and collaborate from anywhere by securely accessing apps and data on any of the latest devices, as easily as they would in their own office. Citrix solutions help IT and service providers build clouds, leveraging virtualization and networking technologies to deliver high-performance, elastic and cost-effective cloud services. With market-leading cloud solutions for mobility, desktop virtualization, networking, cloud platforms, collaboration and data sharing, Citrix helps organizations of all sizes achieve the speed and agility necessary to succeed in a mobile and dynamic world. Citrix products are in use at more than 330,000 organizations and by over 100 million users globally. The reason this was a buy for PRISM was because the company had forecasted a lower Q3 guidance in early October, which plummeted the stock to 52-week lows. The stock traded in line with guidance going into their earnings.
Earnings were released Oct. 23 and were better than expected, beating analyst’s estimates by $0.01. The earnings were also better than the negative guidance the company gave. Citrix reported revenues of $713 million, up 11 percent from the year prior. Cash flows from operation also were up 23 percent from last year. Third quarter GAAP diluted earnings per share were $0.41, and Citrix gave forward-looking guidance on Q4 GAAP diluted earnings per share of $0.66-$0.70 per share. The positive growth from Q3 is what tipped us off about the company, which had been on our radar since the beginning of September. It seemed like an easy decision for the club to buy shares in this company with the positive earnings this quarter and with solid forward looking guidance going into Q4.
The club also liked the fact that Citrix has only missed analyst’s expectation once in the last two years. With a great track record, it was a good reason for PRISM to want some exposure to the company. Another thing that many people do not know about the company is that Citrix owns “GoToMeeting.” Maybe some of you have used this online screen sharing meeting system in your internships or maybe have at least heard of GoToMeeting. This powerful new software allows businesses to be able to host meetings and file share from anywhere with a Wifi connection. GoToMeeting was created by Citrix Systems in 2004 and has seen continuous growth year over year. It also won the 2012 Edison Award for Best Media/Visual Communication. With GoToMeeting being in its infancy still, Citrix should see positive cash flows from this online video conferencing system for years to come.
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