Citrix (CTXS) Still an Attractive Acquisition Target for Many - Barron's (MSFT, HPQ, JAVA, ORCL)
Benefiting from the recent acquisition of Sun Microsystems (NASDAQ: JAVA) by Oracle (NASDAQ: ORCL), Citrix Systems (NASDAQ: CTXS) looks to be a prime target for acquisitions, according to a recent Barron's article.
Companies in today's technology market, and other market's as well, are looking to be the best one-stop shop in the market. Oracle saw the benefit in Sun, and many may see the benefit from Citrix. That's because the company is the first name in the desktop virtualization market. Desktop virtualization allows users to manipulate their desktop computers from almost any location.
Though profits for the company were reported last week with a 47% jump, only eight of 31 analysts have the company at a Buy rating. Some concerns include integration into the cloud computing environment, new programs that may cannibalize older licenses, and an increase in spending that should lower profits.
However, despite these challenges, Citrix should continue to thrive as the demand for desktop virtualization is increasing with cloud computing.
CTXS management has always been conservative, which they believe is a better option than to over-promise and under-deliver.
The application-software sector has a multiple of 20.5x, and Citrix, trading at $42.03, are at a 22x FY10 EPS estimate multiple, not that expensive when comparing the two.
CTXS also has no debt, has more that half of its profits in continuous streams, and has net profit margins of more than 20%.
An analyst at Oscar-Gruss sees either Hewlett-Packard (NYSE: HPQ) or Microsoft (NASDAQ: MSFT) as two major companies that could stand to benefit from CTXS. The analyst sees shares valued at $52 now, or up to $60 if acquired.
Companies in today's technology market, and other market's as well, are looking to be the best one-stop shop in the market. Oracle saw the benefit in Sun, and many may see the benefit from Citrix. That's because the company is the first name in the desktop virtualization market. Desktop virtualization allows users to manipulate their desktop computers from almost any location.
Though profits for the company were reported last week with a 47% jump, only eight of 31 analysts have the company at a Buy rating. Some concerns include integration into the cloud computing environment, new programs that may cannibalize older licenses, and an increase in spending that should lower profits.
However, despite these challenges, Citrix should continue to thrive as the demand for desktop virtualization is increasing with cloud computing.
CTXS management has always been conservative, which they believe is a better option than to over-promise and under-deliver.
The application-software sector has a multiple of 20.5x, and Citrix, trading at $42.03, are at a 22x FY10 EPS estimate multiple, not that expensive when comparing the two.
CTXS also has no debt, has more that half of its profits in continuous streams, and has net profit margins of more than 20%.
An analyst at Oscar-Gruss sees either Hewlett-Packard (NYSE: HPQ) or Microsoft (NASDAQ: MSFT) as two major companies that could stand to benefit from CTXS. The analyst sees shares valued at $52 now, or up to $60 if acquired.
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