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Is Citrix Systems (CTXS) Likely to Beat this Earnings Season?

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Citrix Systems Inc.  is scheduled to report second-quarter 2017 results on Aug 2, after the market closes.

Last quarter, the company recorded a positive earnings surprise of 13.33%. The company surpassed estimates in each of the last four quarters with an average beat of 12.22%. Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Citrix is likely to beat estimates this quarter on the back of its perfect combination of two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +1.18%. This is because the Most Accurate estimate is pegged higher at 86 cents than the Zacks Consensus Estimate of 85 cents. A favorable Zacks ESP serves as a leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Citrix currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have significantly higher chances of beating earnings.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

What is Driving the Better-than-Expected Earnings?

Citrix completed the spin-off and merger of its GoTo products with LogMeIn, Inc. in Feb 2017. We expect these constant product enhancements to be value accretive for the company in the second quarter too. Besides, a centralized management of employee desktops will provide greater security, control and cost savings. This in turn might aid results in the quarter.

Software-as-a-Service (SaaS) revenues are expected to repeat its success story by boosting the top line this quarter as well. However, adverse foreign currency movements might hamper results in the second quarter.

The company expects net revenues in the band of $685--$695 million for the second quarter. Earnings per share (on an adjusted basis) for the quarter are projected in the range of 97 cents--$1.00. 

Citrix Systems, Inc. Price and EPS Surprise

 

Citrix Systems, Inc. Price and EPS Surprise | Citrix Systems, Inc. Quote

Other Stocks to Consider

Investors interested in the broader computer and technology sector may also consider the following stocks, since our model shows that these companies possess the right combination of elements to come up with an earnings beat in their respective quarters:

Apple Inc. (AAPL - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #3. The company will report third-quarter fiscal 2017 results on Aug 1.

AMTEK, Inc. (AME - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3. The company will report second-quarter earnings numbers on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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