Citrix Systems (NASDAQ:CTXS) Driven by Trade Up Program

Citrix Systems (NASDAQ:CTXS) generated good results in its latest quarter, driven by the reintroduction of their "Trade Up" program, which will be implemented throughout 2011, driving revenue even more.

Needham says, "The Citrix results were strong for the DecQ, not unexpectedly, as the 'trade up' program was brought back at the end of the calendar year, and consistently helps revenue growth in the core CTXS business, which was up +14% y/y and +17% q/q. The closely followed subgrouping of Xendesktop (VDI) within the core business had $125m bookings in the DecQ, vs. $60m in SeptQ, and also benefited from upgrade promotions. It is our understanding that the “trade up” programs will now be renewed to last through the entire CY11, which we believe will drive core business results for the year. Our new CY12 estimates assume a moderation of growth, though, and assume the trade-ups will only last through CY11. Guidance for the CY11 was above consensus, though there were questions on the weak MarQ EPS (attributed to 1H11 dilution of Netviewer acquisition in Dec 10). We believe CTXS is poised for a solid CY11, though we believe shares are fairly valued at 4.3x EV/CY12 revenue and 21x P/E."

Needham & Company reiterates a "Hold" rating on Citrix Systems (CTXS), which was trading at $64.72, gaining $1.21, or 1.91 percent.