Intrinsic value of Citrix Systems, Inc. - CTXS

Previous Close

$100.46

  Intrinsic Value

$80.40

stock screener

  Rating & Target

hold

-20%

Previous close

$100.46

 
Intrinsic value

$80.40

 
Up/down potential

-20%

 
Rating

hold

We calculate the intrinsic value of CTXS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 13.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.10
  3.29
  3.46
  3.61
  3.75
  3.88
  3.99
  4.09
  4.18
  4.26
  4.34
  4.40
  4.46
  4.52
  4.57
  4.61
  4.65
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
Revenue, $m
  3,066
  3,167
  3,277
  3,395
  3,523
  3,659
  3,805
  3,961
  4,127
  4,302
  4,489
  4,687
  4,896
  5,117
  5,351
  5,597
  5,857
  6,132
  6,421
  6,725
  7,046
  7,384
  7,739
  8,113
  8,507
  8,920
  9,355
  9,813
  10,294
  10,799
Variable operating expenses, $m
  867
  895
  925
  957
  992
  1,030
  1,070
  1,113
  1,158
  1,207
  1,234
  1,288
  1,346
  1,406
  1,471
  1,538
  1,610
  1,685
  1,765
  1,848
  1,937
  2,029
  2,127
  2,230
  2,338
  2,452
  2,571
  2,697
  2,829
  2,968
Fixed operating expenses, $m
  1,520
  1,553
  1,587
  1,622
  1,658
  1,694
  1,732
  1,770
  1,809
  1,849
  1,889
  1,931
  1,973
  2,017
  2,061
  2,106
  2,153
  2,200
  2,248
  2,298
  2,348
  2,400
  2,453
  2,507
  2,562
  2,618
  2,676
  2,735
  2,795
  2,857
Total operating expenses, $m
  2,387
  2,448
  2,512
  2,579
  2,650
  2,724
  2,802
  2,883
  2,967
  3,056
  3,123
  3,219
  3,319
  3,423
  3,532
  3,644
  3,763
  3,885
  4,013
  4,146
  4,285
  4,429
  4,580
  4,737
  4,900
  5,070
  5,247
  5,432
  5,624
  5,825
Operating income, $m
  680
  719
  765
  816
  872
  935
  1,003
  1,078
  1,159
  1,247
  1,366
  1,468
  1,577
  1,694
  1,819
  1,953
  2,095
  2,247
  2,408
  2,579
  2,761
  2,954
  3,159
  3,377
  3,607
  3,850
  4,108
  4,381
  4,670
  4,975
EBITDA, $m
  785
  828
  876
  930
  990
  1,057
  1,129
  1,208
  1,294
  1,386
  1,486
  1,593
  1,708
  1,831
  1,962
  2,102
  2,251
  2,410
  2,579
  2,758
  2,949
  3,151
  3,366
  3,593
  3,833
  4,088
  4,357
  4,643
  4,944
  5,262
Interest expense (income), $m
  8
  102
  110
  119
  128
  138
  148
  160
  172
  185
  199
  213
  229
  245
  263
  281
  301
  321
  343
  366
  390
  415
  442
  470
  499
  531
  563
  598
  634
  672
  712
Earnings before tax, $m
  577
  609
  646
  688
  735
  787
  844
  906
  975
  1,049
  1,153
  1,239
  1,332
  1,432
  1,538
  1,652
  1,774
  1,904
  2,042
  2,190
  2,346
  2,513
  2,690
  2,877
  3,076
  3,287
  3,510
  3,747
  3,997
  4,262
Tax expense, $m
  156
  164
  174
  186
  198
  212
  228
  245
  263
  283
  311
  335
  360
  387
  415
  446
  479
  514
  551
  591
  633
  678
  726
  777
  831
  887
  948
  1,012
  1,079
  1,151
Net income, $m
  421
  445
  471
  502
  536
  574
  616
  662
  711
  766
  842
  905
  972
  1,045
  1,123
  1,206
  1,295
  1,390
  1,491
  1,598
  1,713
  1,834
  1,963
  2,100
  2,246
  2,399
  2,563
  2,735
  2,918
  3,112

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,296
  5,470
  5,659
  5,864
  6,084
  6,320
  6,572
  6,841
  7,127
  7,431
  7,753
  8,095
  8,456
  8,838
  9,241
  9,667
  10,117
  10,590
  11,090
  11,616
  12,170
  12,753
  13,367
  14,012
  14,692
  15,406
  16,158
  16,948
  17,778
  18,651
Adjusted assets (=assets-cash), $m
  5,296
  5,470
  5,659
  5,864
  6,084
  6,320
  6,572
  6,841
  7,127
  7,431
  7,753
  8,095
  8,456
  8,838
  9,241
  9,667
  10,117
  10,590
  11,090
  11,616
  12,170
  12,753
  13,367
  14,012
  14,692
  15,406
  16,158
  16,948
  17,778
  18,651
Revenue / Adjusted assets
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
  0.579
Average production assets, $m
  1,217
  1,257
  1,301
  1,348
  1,398
  1,453
  1,511
  1,572
  1,638
  1,708
  1,782
  1,861
  1,944
  2,031
  2,124
  2,222
  2,325
  2,434
  2,549
  2,670
  2,797
  2,931
  3,072
  3,221
  3,377
  3,541
  3,714
  3,896
  4,087
  4,287
Working capital, $m
  -898
  -928
  -960
  -995
  -1,032
  -1,072
  -1,115
  -1,161
  -1,209
  -1,261
  -1,315
  -1,373
  -1,435
  -1,499
  -1,568
  -1,640
  -1,716
  -1,797
  -1,881
  -1,971
  -2,065
  -2,163
  -2,268
  -2,377
  -2,492
  -2,614
  -2,741
  -2,875
  -3,016
  -3,164
Total debt, $m
  2,042
  2,197
  2,366
  2,549
  2,746
  2,956
  3,182
  3,422
  3,677
  3,948
  4,236
  4,541
  4,864
  5,205
  5,565
  5,946
  6,347
  6,770
  7,216
  7,686
  8,180
  8,701
  9,249
  9,826
  10,433
  11,071
  11,742
  12,447
  13,189
  13,968
Total liabilities, $m
  4,729
  4,885
  5,054
  5,236
  5,433
  5,644
  5,869
  6,109
  6,364
  6,636
  6,924
  7,228
  7,551
  7,892
  8,252
  8,633
  9,034
  9,457
  9,903
  10,373
  10,867
  11,388
  11,936
  12,513
  13,120
  13,758
  14,429
  15,134
  15,876
  16,656
Total equity, $m
  567
  585
  606
  627
  651
  676
  703
  732
  763
  795
  830
  866
  905
  946
  989
  1,034
  1,082
  1,133
  1,187
  1,243
  1,302
  1,365
  1,430
  1,499
  1,572
  1,648
  1,729
  1,813
  1,902
  1,996
Total liabilities and equity, $m
  5,296
  5,470
  5,660
  5,863
  6,084
  6,320
  6,572
  6,841
  7,127
  7,431
  7,754
  8,094
  8,456
  8,838
  9,241
  9,667
  10,116
  10,590
  11,090
  11,616
  12,169
  12,753
  13,366
  14,012
  14,692
  15,406
  16,158
  16,947
  17,778
  18,652
Debt-to-equity ratio
  3.600
  3.750
  3.910
  4.060
  4.220
  4.370
  4.520
  4.670
  4.820
  4.970
  5.110
  5.240
  5.380
  5.500
  5.630
  5.750
  5.860
  5.970
  6.080
  6.180
  6.280
  6.380
  6.470
  6.550
  6.640
  6.720
  6.790
  6.860
  6.930
  7.000
Adjusted equity ratio
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107
  0.107

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  421
  445
  471
  502
  536
  574
  616
  662
  711
  766
  842
  905
  972
  1,045
  1,123
  1,206
  1,295
  1,390
  1,491
  1,598
  1,713
  1,834
  1,963
  2,100
  2,246
  2,399
  2,563
  2,735
  2,918
  3,112
Depreciation, amort., depletion, $m
  106
  109
  112
  115
  118
  122
  126
  130
  134
  139
  120
  125
  130
  136
  143
  149
  156
  163
  171
  179
  188
  197
  206
  216
  227
  238
  249
  261
  274
  288
Funds from operations, $m
  527
  553
  583
  617
  654
  696
  742
  792
  846
  904
  961
  1,030
  1,103
  1,181
  1,265
  1,355
  1,451
  1,553
  1,662
  1,778
  1,901
  2,031
  2,170
  2,316
  2,472
  2,637
  2,812
  2,997
  3,192
  3,399
Change in working capital, $m
  -27
  -30
  -32
  -35
  -37
  -40
  -43
  -46
  -49
  -52
  -55
  -58
  -61
  -65
  -68
  -72
  -76
  -80
  -85
  -89
  -94
  -99
  -104
  -110
  -115
  -121
  -127
  -134
  -141
  -148
Cash from operations, $m
  554
  583
  615
  652
  692
  736
  784
  837
  894
  956
  1,016
  1,087
  1,164
  1,246
  1,334
  1,427
  1,527
  1,634
  1,747
  1,867
  1,994
  2,130
  2,274
  2,426
  2,587
  2,758
  2,939
  3,131
  3,333
  3,547
Maintenance CAPEX, $m
  -79
  -82
  -84
  -87
  -90
  -94
  -97
  -101
  -106
  -110
  -115
  -120
  -125
  -130
  -136
  -143
  -149
  -156
  -163
  -171
  -179
  -188
  -197
  -206
  -216
  -227
  -238
  -249
  -261
  -274
New CAPEX, $m
  -38
  -40
  -44
  -47
  -51
  -54
  -58
  -62
  -66
  -70
  -74
  -78
  -83
  -88
  -93
  -98
  -103
  -109
  -115
  -121
  -127
  -134
  -141
  -148
  -156
  -164
  -173
  -182
  -191
  -201
Cash from investing activities, $m
  -117
  -122
  -128
  -134
  -141
  -148
  -155
  -163
  -172
  -180
  -189
  -198
  -208
  -218
  -229
  -241
  -252
  -265
  -278
  -292
  -306
  -322
  -338
  -354
  -372
  -391
  -411
  -431
  -452
  -475
Free cash flow, $m
  438
  461
  487
  517
  551
  588
  629
  674
  723
  776
  827
  889
  956
  1,028
  1,105
  1,187
  1,275
  1,369
  1,468
  1,575
  1,688
  1,808
  1,936
  2,071
  2,215
  2,367
  2,529
  2,700
  2,881
  3,073
Issuance/(repayment) of debt, $m
  145
  156
  169
  183
  197
  211
  225
  240
  255
  271
  288
  305
  323
  341
  360
  380
  401
  423
  446
  470
  495
  521
  548
  577
  607
  638
  671
  706
  742
  780
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  145
  156
  169
  183
  197
  211
  225
  240
  255
  271
  288
  305
  323
  341
  360
  380
  401
  423
  446
  470
  495
  521
  548
  577
  607
  638
  671
  706
  742
  780
Total cash flow (excl. dividends), $m
  582
  617
  656
  700
  747
  799
  854
  914
  978
  1,048
  1,115
  1,194
  1,279
  1,369
  1,465
  1,567
  1,676
  1,792
  1,914
  2,045
  2,183
  2,329
  2,484
  2,648
  2,822
  3,006
  3,200
  3,405
  3,623
  3,852
Retained Cash Flow (-), $m
  -15
  -19
  -20
  -22
  -24
  -25
  -27
  -29
  -31
  -33
  -34
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -66
  -69
  -73
  -76
  -80
  -85
  -89
  -93
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  567
  598
  636
  678
  724
  773
  827
  885
  948
  1,015
  1,081
  1,158
  1,240
  1,328
  1,422
  1,522
  1,628
  1,741
  1,861
  1,988
  2,123
  2,267
  2,418
  2,579
  2,749
  2,929
  3,120
  3,321
  3,534
  3,759
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  544
  547
  554
  558
  561
  561
  559
  553
  544
  532
  513
  494
  472
  446
  417
  387
  354
  321
  287
  253
  220
  188
  158
  131
  107
  85
  67
  51
  39
  28
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Citrix Systems, Inc. offers Enterprise and Service Provider products, which include Workspace Services solutions and Delivery Networking products. The Company's Enterprise and Service Provider products include Cloud Services solutions, and related license updates and maintenance, support and professional services. The Company's NetScaler nCore Technology is an architecture that enables execution of multiple packet engines in parallel. The Company's workspace services include Application Virtualization and virtual desktop infrastructure (VDI), Enterprise Mobility Management and Citrix Workspace Suite. The Company's NetScaler ADC is a software-defined application delivery controller (ADC) and load balancer. The Company's Cloud Services include ShareFile and Citrix Cloud. It provides various ways for customers to receive upgrades, support and maintenance for products, which include Software Maintenance, Subscription Advantage, Technical Support Services and Hardware Maintenance.

FINANCIAL RATIOS  of  Citrix Systems, Inc. (CTXS)

Valuation Ratios
P/E Ratio 29.3
Price to Sales 4.6
Price to Book 6
Price to Tangible Book
Price to Cash Flow 14.1
Price to Free Cash Flow 16.4
Growth Rates
Sales Growth Rate 4.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.4%
Cap. Spend. - 3 Yr. Gr. Rate -1.7%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 3.1%
Total Debt to Equity 54.7%
Interest Coverage 78
Management Effectiveness
Return On Assets 9.2%
Ret/ On Assets - 3 Yr. Avg. 6.6%
Return On Total Capital 14.6%
Ret/ On T. Cap. - 3 Yr. Avg. 10.5%
Return On Equity 23.4%
Return On Equity - 3 Yr. Avg. 16%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 83.7%
Gross Margin - 3 Yr. Avg. 81.7%
EBITDA Margin 25.6%
EBITDA Margin - 3 Yr. Avg. 22.3%
Operating Margin 19%
Oper. Margin - 3 Yr. Avg. 13.1%
Pre-Tax Margin 18.1%
Pre-Tax Margin - 3 Yr. Avg. 12.1%
Net Profit Margin 15.7%
Net Profit Margin - 3 Yr. Avg. 11.1%
Effective Tax Rate 13.1%
Eff/ Tax Rate - 3 Yr. Avg. 6.5%
Payout Ratio 0%

CTXS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CTXS stock intrinsic value calculation we used $2974 million for the last fiscal year's total revenue generated by Citrix Systems, Inc.. The default revenue input number comes from 0001 income statement of Citrix Systems, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CTXS stock valuation model: a) initial revenue growth rate of 3.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CTXS is calculated based on our internal credit rating of Citrix Systems, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Citrix Systems, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CTXS stock the variable cost ratio is equal to 28.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1487 million in the base year in the intrinsic value calculation for CTXS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Citrix Systems, Inc..

Corporate tax rate of 27% is the nominal tax rate for Citrix Systems, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CTXS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CTXS are equal to 39.7%.

Life of production assets of 14.9 years is the average useful life of capital assets used in Citrix Systems, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CTXS is equal to -29.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $551.519 million for Citrix Systems, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 131.741 million for Citrix Systems, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Citrix Systems, Inc. at the current share price and the inputted number of shares is $13.2 billion.

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