Should you buy Citrix shares as it issues FY2021 EPS guidance ahead of estimates?

On Thursday, Citrix Systems Inc. (NASDAQ:CTXS) shares gained 1.2% after announcing its fiscal third-quarter results. The company announced its most recent quarterly results before markets opened, beating analyst expectations in revenue and earnings. Citrix also issued FY2021 earnings guidance above estimates, while its revenue forecast lagged expectations.

The company posted FQ3 non-GAAP earnings per share of $1.20, beating the average analyst expectation of $0.95. In addition, its GAAP EPS of $0.41 outperformed the average estimate of $0.36, while revenue for the quarter increased marginally by 1.5% from the same quarter a year ago to $778.44 million, $7.89 million ahead of expectations.

The company issued a full-year 2021 revenue forecast in the range of $3.19 billion to $3.20 billion, falling below the Street estimate of $3.23 billion. However, its adjusted EPS guidance of $4.90-$4.95 was ahead of the Street forecast of $4.85.

Has Citrix stock bottomed?

From an investment perspective, Citrix shares are down more than 25% this year, pushing its trailing 12-month P/E and forward P/E ratios to 32.63 and 16.51, respectively. Therefore, the stock could be an exciting option for value investors.

On the other hand, analysts forecast an earnings decline of about 20.50% this year before bouncing back by 15.60% next year. Therefore, growth investors could opt for alternatives in the market.

Technically, Citrix Systems shares seem to be trading within a descending channel formation in the intraday chart. However, the stock recently rallied to find the trendline resistance, creating an opportunity for a pullback.

Nonetheless, with shares far from reaching overbought conditions, the current rally could lead to a channel breakout. 

Therefore, investors could target extended gains at about $99.18, or higher at $104.28. On the other hand, $90.90 and $85.33, are crucial support levels.

It could be time to buy CTXS stock

In summary, although Citrix Systems shares surged marginally after reporting solid Q3 results, the stock could extend gains amid its compelling valuation multiples.

Moreover, its shares are far from reaching overbought conditions, leaving room for more upward movement.