Canaccord bullish on remote accessThought this may be of interest to all the ONE people. I know its the competition but I like their thesis.
Have a Great Weekend, Cheers
CITRIX SYSTEMS
(CTXS : NNM : US$22.55) HOLD | Target price: US$25.00
Event
We are initiating coverage on Citrix Systems with a HOLD recommendation and US$25.00 target.
Thesis
We are bullish on the remote access market opportunity. The challenge for the company, we feel, will be to overcome its “Swiss army knife” reputation by developing a more targeted approach for its products. In the end, we like the space, we like Citrix’s well established channel, and will look to see whether the management team can overcome
near-term obstacles.
Valuation
Citrix is currently trading at a modest premium to its comps with a 21.5 times FTM EPS multiple. From an EV/Sales perspective, the company is valued at 4 times versus the peer group average of 3 times. Our US$25.00 target is based on a 24 times FTM P/E multiple, a slight premium to slower growing peers.
Daily Letter | 14
July 15, 2005
Highlights
Citrix is one of the leaders in the remote access market; strong customer base and channel relationships; recent acquisitions appear to broaden product offering; apparently solid relationship with Microsoft expected to bear fruit.
Investment risks
Integration challenges with recent acquisitions; reorganization of sales group could continue to trigger execution challenges; customer confusion over new offerings and core competencies; Microsoft relationship could deteriorate.
An analyst has visited the issuer’s material operations in Fort Lauderdale, Florida. No payment or reimbursement was received from the issuer for the related travel costs.