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Citrix (CTXS) Digital Workspace Solutions Adopted by Synopsys

Citrix Systems CTXS digital workspace and security access solutions were adopted by Synopsys SNPS to set up an agile digital work platform and zero trust-based security framework.

Synopsys is utilizing Citrix Workspace offerings to provide safe access to the virtual desktops, web, mobile apps, software as a service (“SaaS”), and other content that employees require to carry on with their work seamlessly, noted Citrix.

The company is implementing security solutions like Citrix Secure Workspace Access and Citrix Analytics for Security as well as Citrix ADC solution. Security solutions will enable the company to authenticate user access based on location and device posture. The security solutions will also help Synopsys to keep a constant tab on application and network and user performance and will help in dynamic application of secure access policies, added Citrix.

There have been increasing instances of cybersecurity attacks amid a sudden shift to remote work setup. Citrix workspace solutions are designed to aid clients in safeguarding classified data and personal information across all devices and locations and augment employee productivity.

Headquartered in Mountain View, CA, Synopsys is a vendor of electronic design automation (“EDA”) software to the semiconductor and electronics industries.

 

Increasing Demand for Workspace Solutions

Continuation of work from home and online learning is driving demand for Citrix’s workspace and security access solutions. Companies across the globe have started to adopt a hybrid/flexible work model, which is expected to drive demand for digital workspace solutions in the post-pandemic world.

The buyout of Wrike is expected to consolidate the company’s presence in the SaaS-based collaborative work management solutions’ space. In March 2021, Citrix purchased Wrike for $2.25 billion to strengthen its unified digital workspace solutions’ portfolio.

The company boasts a strong customer base of more than 400,000 global business enterprises. These enterprises leverage the company’s wide-ranging portfolio of digital workspace and security solutions, including Citrix SD-WAN, Citrix Secure Workplace Access solutions, Citrix Virtual Apps and Desktops, Citrix Endpoint Management and Citrix Secure Browser.

However, Citrix’s shares have fared terribly on the trading front this year as its transition to subscription-based model has become a tedious affair. The transition is exerting pressure on Product and License revenues as well as Support and Services revenues.

Citrix’s highly-leveraged balance sheet is a concern. As of Jun 30, 2021, the company’s cash and cash equivalents and investments stood at $532 million. Long-term debt at the end of the quarter was $3.474 billion. In first-quarter 2021, Citrix entered into a $1-BILLION unsecured term loan agreement to finance the buyout of Wrike. It also issued $750 million worth of senior notes (slated to mature in 2026).

In the last reported quarter, the company announced that it was incorporating various changes to its sales organization as well as processes and go-to-market strategies in the second half of 2021 to boost its SaaS operations. Citrix lowered its outlook for 2021 due to a negative impact from these organizational changes.

For 2021, Citrix expects revenues between $3.22 billion and $3.25 billion compared with the earlier guidance of $3.38-$3.42 billion.

Per a recent Bloomberg report, the company is discussing with its advisers to explore the company’s sale amid a bleak stock performance. There is no official word on the matter from Citrix.

Bloomberg stated that Citrix will be evaluating the interest of the prospective buyers over the next few weeks, citing sources familiar with the matter. The company is exploring strategic alternatives after activist investor Elliot Investment Management bought a 10% stake in the company, stated the report.

On a year-to-date basis, shares of Citrix are down 14.7% compared with the industry’s growth of 31%. In the past year, the stock has declined 17.2% against the S&P 500 index’s rally of 36.9%.

Zacks Rank and Stocks to Consider

At present, Citrix carries a Zacks Rank #5 (Strong Sell).

Some other better-ranked stocks in the Computer Technology sector include Microsoft MSFT, and Cadence Design Systems CDNS. Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.

Long-term earnings growth rate for Microsoft and Cadence is pegged at 11.1% and 11.7%, respectively.


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Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Citrix Systems, Inc. (CTXS): Free Stock Analysis Report
 
Synopsys, Inc. (SNPS): Free Stock Analysis Report
 
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