Back to top

Zacks Investment Ideas feature highlights: Micron, Citrix, Cadence and Salesforce.com

Read MoreHide Full Article

For Immediate Release

Chicago, IL – May 24, 2018 – Today, Zacks Investment Ideas feature highlights Features: Micron Technologies (MU - Free Report) , Citrix Systems (CTXS - Free Report) , Cadence Design Systems Inc. (CDNS - Free Report) and Salesforce.com (CRM - Free Report) .

Hardware Gets the Attention, but Software Stocks Are on the Rise

In the high-tech space, hardware manufacturers have enjoyed the lion’s share of the news and commentary recently.  Semiconductor stocks in particular have had a wild ride in 2018, with the Philadelphia Semiconductor Index rising 19% between February 8th and March 12th, only to retrace the rally as it sank 14% by April 25th.


Concerns about a global demand slowdown, reduced cryptocurrency mining and tightening margins due to commoditization - especially in DRAM and flash memory - spooked investors.    A number of positive earnings reports alleviated the fears and semiconductor stocks have staged a partial comeback, led by Micron Technologies, which is up 28% in the past month.

With action like that, it’s no wonder hardware has dominated the financial news cycle.

Quietly, several major producers of software have posted strong earnings and guidance and had estimates revised upward.  Investors are taking notice as shares of these three strong performers are starting to rise.

Citrix Systems provides business virtualization solutions to business through three major product lines, XenApp, NetScaler and Citrix Workspace.  Partners with Microsoft,Alphabetand twelve other large technology companies, Citrix allows users to transform the traditional workspace by providing secure access to applications, desktops and data on any device.

In Q1, Citrix delivered earnings of $1.29/share, beating the Zacks Consensus Estimate of $1.05/share, its fourth consecutive earning surprise in a row.  The company also raised full year earnings guidance to a range of $5.20 – $5.30/share.  12 analyst upward revisions followed and the 2018 consensus estimate now stands at $5.27/share.  Citrix is a Zacks Rank #1 (Strong Buy).

Cadence Design Systems Inc. provides design technologies to the producers of high tech equipment, including the semiconductor industry.  


While announcing strong Q1 results in which Cadence beat the Zacks Consensus Earnings Estimate of $0.38/share by $0.02, CFO John Wall stated “We are pleased with results of all of our key operating metrics including revenue, operating margin, EPS and operating cash flow.  On the strength of our first quarter business and continuing momentum, we are raising our outlook for the year.”

The company now expects 2018 Revenue in the range of $2.05B - $2.1B and Earnings of $1.57 - $1.65/share.  The shares, which formerly closely tracked the Consumer Software Services market as a whole, are beginning to break out, up 5.6% this year versus an industry average of -3.1%.  Cadence is a Zacks Rank #1 (Strong Buy).

Famously founded in the San Francisco apartment of ex-Oracle executive Marc Benioff in 1999, Salesforce.com is now the world’s leading provider of “Software as a Service,” allowing businesses of all sizes to build their own applications either on their own architecture or in Salesforce’s cloud environment.

Salesforce provides its CRM (customer resource management) software services to over 100,000 customers worldwide.  

Salesforce shares are up 24% in 2018.

After modest earnings beats in the past 14 quarters, Salesforce is expected to report revenues of $2.94B and earnings of $0.46/share when it releases fiscal Q4 results on May 29th.  The Zacks Consensus Estimate for full year earnings has risen almost 25% over the past 90 days to $2.13/share, earning Salesforce a Zacks rank #1 (Strong Buy).

Follow us on Twitter:  http://twitter.com/ZacksResearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.



More from Zacks Press Releases

You May Like