Tigress Financial Partners' CIO Explains Why They Downgraded Citrix Systems

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Shares of Citrix Systems, Inc.
CTXS
are down on Friday afternoon, following a downgrade by Tigress Financial Partners from a Strong Buy to a Buy rating. In a report published Friday, the firm's Chief Investment Officer Ivan Feinseth explained the demotion: the better than expected fourth quarter results showed "notable strength in license revenue, data center and the Workspace Suite. However, CTXS performance metrics have come under pressure due to the company's decelerating Y/Y topline growth." Citrix Systems also announced a restructuring program mainly aimed at "organizational alignment and workforce reduction," which the company estimates will generate pre-tax savings of $90 million-$100 million. However, as mentioned above, performance metrics have felt some pressure. Over 2014, the company saw its sales growth decelerate to 7.7 percent, from 12.9 percent in 2013. Because of this, Citrix's sales growth now ranks in the 43rd percentile of Tigress' 2,200 company universe, weighing on its overall performance score. "The company has also experienced compression in its EBITDAR and NOPAT margins also impacting key performance indicators – the report highlights. Over the past year EBITDAR margin has gone from 43.0% to 41.5% and NOPAT margin declined from 12.2% to 11%."
Posted In: Analyst ColorNewsDowngradesAnalyst RatingsMoversTechIvan FeinsethTigress Financial Partners
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