Citrix Systems, Inc. (CTXS) is scheduled to report fourth-quarter 2016 results on Jan 25, after the market closes. Last quarter, the company recorded a positive earnings surprise of 14.43%. Moreover, the company beat estimates in each of the last four quarters with the average earnings surprise of 25.12%.
Let’s see how things are shaping up for this announcement.
These Key Factors Are In Play this Quarter
A major positive for Citrix is its impressive product portfolio, which it keeps enhancing through the implementation of cutting-edge technology. Citrix also raised its earnings per share guidance (adjusted basis) for 2016 to a band of $5.18–$5.20 from $5.00–$5.10.
We also expect the company’s acquisition strategy to benefit its performance going forward.
However, the company faces risks from adverse foreign exchange movements due to its vast global presence. Citrix also faces stiff competition from peers like Exa Corp (EXA) and Symantec Corporation (SYMC).
We note that shares of the company outperformed the Zacks categorized Computer Software industry in the past three months. The company gained 8.41% over the period, while the industry registered an increase of only 5.64%.
CTCS Earnings Whispers Are Mixed
Our proven model does not conclusively show that Citrix is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen.
Unfortunately, this is not the case here as elaborated below.
Zacks ESP: Citrix has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.26. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Citrix carries a Zacks Rank #3, which increases the predictive power of ESP.
However, the company’s 0.00% ESP makes surprise prediction difficult…
Conversely, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here is a stock which we believe has the right combination of elements to post an earnings beat this quarter.
Microsoft Corporation (MSFT) has an Earnings ESP of +1.28% and a Zacks Rank #2. The company is expected to report second-quarter fiscal 2017 earnings on Jan 26.You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks’ private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks’ private trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report