Citrix Enhances Product Portfolio - Analyst Blog

Citrix Systems Inc.(CTXS), which offers cloud computing service to PC and laptop users, has turned its focus toward mobile computing with the launch of GoToAssist application for iPhones and Android-based handsets.

As smartphone and tablet usage is gaining momentum in the corporate world, the need for virtual network in mobile phone is also expanding. The GoToAssist application will enable smartphone users to host virtual meeting as well as send and receive official files. Moreover, the availability of Citrix’s popular GoToMeeting video conferencing application in the iPad tablets will further boost the company’s cloud computing solutions.

The company also launched another mobile application service called CloudGateway2 that provides Windows, web, software delivery, mobile applications and data to any device, anywhere. CloudGateway2 also facilitates data access policies, determine the best possible applications that can be utilized by users in varied locations.

We believe that the launch of GoToAssist application for smartphone users coupled with huge growth opportunity in virtualization and cloud computing market, given Desktop virtualization will touch the 100 million personal computers mark by 2013, and the web conferencing market size will likely touch $4 billion by 2014, will act as a positive catalyst for the company going forward.

However, the ongoing macroeconomic uncertainty may act as a headwind for the company as it restricts several firms from their targeted IT spending. Additionally, high cost associated with virtualization may restrict the long-term prospect of Citrix. Finally, increased competition from VMware Inc (VMW) provides certain downside risks for the company.  

Considering these factors, we maintain our long-term Neutral recommendation on Citrix systems. Currently, Citrix Systems has a Zacks #2 Rank, implying a short-term Buy rating on the stock.