Yahoo Finance What Drove Citrix’s Stock after Its Fiscal 1Q16 Results?
Citrix Beat Expectations with Its 1Q16: Here's Why
Consistent growth and fiscal 2Q16 guidance caused Citrix Stock to rise ~7%
Previously in this series, we discussed Citrix (CTXS) recently announced fiscal 1Q16 results. Not only did Citrix’s results beat analysts’ expectations, but its earnings also rose 81%—though its small base can’t be ignored. As a result, Citrix shares rose ~7% after its fiscal 1Q16 earnings results on April 20. Moreover, the company’s earnings guidance for fiscal 2Q16 also topped analysts’ expectations, further boosting the stock.
As the share price chart below shows, after hitting a steep low in February 2016, Citrix stock has consistently risen. In February 2016, Tableau Software (DATA) and LinkedIn’s (LNKD) issued weaker-than-expected guidance for 2016 that caused several technology players’ shares to tumble. Salesforce (CRM), Fortinet (FTNT), Palo Alto Networks (PANW), FireEye (FEYE), CyberArk (CYBR), and Proofpoint (PFPT) were some of the stocks that fell in the range of 7% to 13%.
Commenting on Citrix’s performance, Kirill Tatarinov, Citrix’s CEO, stated, “The progress we made in refocusing the company – simplifying our portfolio and sharpening our message – is starting to pay off.”
Citrix’s recent restructuring involved the layoff of approximately 1,000 employees and contractors, the pending spinoff of company’s “GoTo” family of offerings, and a $200 million annual cut in other operating expenses.
Fiscal 2Q16 expectations
For fiscal 2Q16, Citrix stated that it expects its revenue and earnings per share to be in the range of $810 million–$820 million and $1.12–$1.15, respectively. Citrix’s earnings guidance for fiscal 2Q16 topped analysts’ estimates, which expected Citrix to report revenues and EPS of $813 million and $1.11, respectively.
Investors who want to gain exposure to Citrix could consider investing in the SPDR S&P 500 ETF (SPY). SPY invests ~0.07% of its holdings in Citrix. It also has ~8% exposure to the application software sector.
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