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Analyzing Citrix Systems’ Value Proposition in the Software Space



Citrix Systems’ scale in the software space

Earlier in this series, we discussed analysts’ expectations from Citrix Systems’ (CTXS) recently announced fiscal 2Q16 earnings. We also discussed the recently announced LogMeIn-GoToMeeting merger and its effect on Citrix and its shareholders.

Let’s now look at the value proposition of the company in software space, starting with Citrix Systems’ size. As of July 27, 2016, and as the above chart shows, Microsoft (MSFT) was the largest player by market capitalization in this space. It is followed by SAP (SAP). VMware (VMW) and Citrix are relatively new players in this space.

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Citrix’s enterprise value multiples

Now let’s look at Citrix’s EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple. We’ll also look at the multiples of other players in this space. Citrix was trading at a forward EV-to-EBITDA multiple of ~9.8x on July 27, 2016. This metric was lower than the multiples of peers Microsoft and SAP, at ~9.9x and 12.6x, respectively. VMware’s forward EV-to-EBITDA multiple stood at 8.8x.

Citrix’s dividend yield

Microsoft’s forward annual dividend yield was ~2.6% as of July 27, 2016. SAP’s forward dividend yield was ~1.5%. VMware and Citrix don’t pay dividends. In the final part of our series, we’ll see what analysts are recommending for Citrix Systems.


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