Citrix Systems Stock Gaps Higher Again After Quarterly Results

CTXS actually landed on a Schaeffer's list of stocks contrarians should target

Jul 26, 2018 at 10:19 AM
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Software specialist Citrix Systems, Inc. (NASDAQ:CTXS) is rallying after earnings for a second straight quarter, after the company's second-quarter results topped estimates. Adjusted earnings for the period came in at $1.28 per share compared to an average forecast for $1.20, and revenue of $742 million was way above the consensus view of $717 million. As such, CTXS stock is up 5.7% at $115.43, already hitting an all-time high of $116.82.

And also like last quarter's report, analysts are reacting quickly, with at least eight so far raising their price targets. In fact, Stifel, RBC, Cowen, and Baird all hiked their price targets for Citrix Systems to $120. It may be surprising to note, however, that just three of the 16 brokerage firms that cover CTXS recommend buying it, even though it's up almost 38% during the past 12 months. This setup actually helped land the equity on a list of stocks contrarian traders should consider right now, produced by our Senior Quantitative Analyst Rocky White.

Analysts aren't the only ones that have been betting against the equity. Short interest has continued to rise, including a 21.7% jump in the past two reporting periods, and now represents 8.4% of the float. If you go by the stock's average daily trading volume, it would take short sellers nearly two weeks to cover their positions.

There was some bullish activity in the options pits leading up to earnings, however. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 18.71, which ranks in the 90th annual percentile. So while options volume has been light on an absolute basis, call buying has still been the predominant trend. Of course, some of that activity may have been from shareholders hedging their positions.

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