Thomas Weisel upgraded enterprise software maker Citrix Systems (CTXS) to outperform from peer perform.
Analyst Tom Ernst says the Street estimates and current valuation don't include revenue growth acceleration from the upcoming release of MetaFrame 3.0, which he expects to be available in May. He says contrary to the Street, the company's business was fundamentally healthy on new products, the upcoming product cycle, an improving environment, and increased visibility. He notes Citrix effected a 7% to 10% increase in retail pricing, and will use additional revenue to compensate channel partners.
Ernst expects healthier margins for channel partners to fuel robust sales. He raised the 85 cents 2004 earnings per share estimate to 88 cents, and upped the 95 cents 2005 earnings per share estimate to 98 cents.