Citrix Systems Inc.CTXS

Morningstar Rating

Stock Research and Analysis

by Sunit Gogia

For a long time, IT personnel have used Citrix Systems' application virtualization technology to run regular software applications on central servers and provide employees access to those applications over a computer network. For example, rather than Read more

Bulls Say

Citrix's approach of virtualizing operating systems and applications independently of each other sets it apart from the competition.

The company has recently allocated greater resources to selling NetScaler to enterprise customers, leading to faster sales growth in the latter half of 2007.

Citrix's online services are differentiated by their focus on small and medium-size businesses, resulting in average annual revenue growth of almost 70% during the last four years. Read more

Bears Say

Server and desktop virtualization are key strategic areas for Microsoft, and Citrix's Windows-focused virtualization efforts could eventually face intense direct competition from Microsoft.

Any security breach in Citrix's online services would expose the company to potential headline risk if customer data is compromised.

Citrix relies heavily on its partnership with Microsoft to develop its products; any damage to this relationship could have a severe impact on the company's revenues and profits.

Citrix's edge in desktop virtualization technology is unlikely to last for a long time. Read more

Strategy

Citrix is targeting its server virtualization solutions at the midmarket segment to avoid direct competition withy industry leader VMware. Additionally, in contrast to VMware's proprietary virtualization Read more

Management

Mark Templeton is CEO and president of Citrix. Templeton received total compensation of about $4.5 million in 2008, which is reasonable for his stewardship of the company, in our opinion. We think Templeton's ownership of almost 1 million of the company's Read more

Profile

Citrix develops and sells software tools that enable enterprises to efficiently manage and deliver software applications over computer networks. The company leads the market Read more

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