Why Citrix Systems Is Ready to Rebound

Does this analyst make a good case? Or is it just more noise from Wall Street?

Jan 31, 2014 at 11:00AM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Citrix Systems (NASDAQ:CTXS) bounced back 2% this morning after Nomura Securities upgraded the cloud computing company from neutral to buy.

So what: Along with the upgrade, analyst Rick Sherlund planted a price target of $70 on the stock, representing about 31% worth of upside to yesterday's close. While momentum traders might be turned off by yesterday's earnings-related drop, Sherlund believes Citrix's risk/reward trade-off is now too cheap to pass up.

Now what: Nomura expects Citrix to post 2014 and 2015 earnings per share of $2.87 and $3.18, respectively. "Overall company revenue growth of 8% is coming largely from lower gross margin NetScaler, so the mix shift is creating some near-term margin pressure," Sherlund noted. "We think the low valuation provides some downside protection and there are a number of things that could go right that are not likely reflected in the share price." With Citrix shares off about 30% from their 52-week highs and trading at roughly four times recurring maintenance and subscription revenue, it's tough to disagree with Nomura's bullishness.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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