Citrix stock price forecast after the large Elliot Management stake

By: Crispus Nyaga
Crispus Nyaga
Crispus is an active trader, where he is followed and copied at Capital.com. He lives in Nairobi with his… read more.
on Sep 8, 2021
  • Citrix stock price popped by more than 5% in extended hours.
  • The performance happened after Elliot Management took a stake in the company.
  • The renowned hed fund could push for more changes, including a sale.

The Citrix (NASDAQ: CTXS) stock price will be in the spotlight after Elliot Management acquired a large stake. The stock closed at $103.50, valuing the company at more than $12.6 billion. It then rallied by more than 5% in extended hours. They are down by more than 30% from the year-to-date high.

Elliot acquires Citrix stake

Citrix is a technology company that offers a digital workspace solution that helps employees in most companies work wherever they are. As such, the company’s solutions saw an uptick in demand in 2020 as the Covid pandemic pushed more people to work remotely. 

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Citrix business has been changing. For example, the company now makes most of its money through subscriptions. This is different from the previous model when it made money by selling perpetual licenses. It is also seeing more growth in the on-premise cloud.

The Citrix stock price will be in focus on Wednesday after Elliot Management acquired a $1 billion stake. This makes the hedge fund one of the biggest shareholders in the company. Led by Paul Singer, Elliot is one of the most active activist investors. Some of the companies he has invested in before are eBay, SAP, Twitter, and GlaxoSmithKline. 

According to the Wall Street Journal, Elliot wants the management to take action to boost its share price. The report did not cite the actions the hedge fund wants to take. Some analysts believe that the company’s relatively small size compared to firms like VMware makes it an attractive takeout target from a bigger rival or from a private equity firm.

So, is the Citrix stock a good buy? Citrix is tracked by 13 Wall Street analysts. 38% of these analysts have a buy rating on the stock while 46% of them have a hold rating. 13% of them have a sell rating on the company. The most optimistic analyst expects that the stock will jump to $145 while the most pessimistic expects it to drop to $85.

Citrix stock price forecast

citrix stock price

The daily chart shows that the Citrix stock price gapped lower in August after the company published the relatively weak financial results. The firm has remained near the lowest point for a while. It is also below the 25-day and 50-day moving averages. Notably, the shares rose by more than 5% to $109 in extended hours after the news on Elliot.

Therefore, there is a likelihood that the CTXS stock price will rebound and rise to the 50% Fibonacci retracement level at around $120.

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