Per the economy, Friar quotes Citrix management as saying that, “due to the cost reduction nature of its product, the company actually tends to outperform in weaker economic environments.” Meaning, you can use Citrix’s “virtual copy of Microsoft’s Windows (MSFT) to actually lower the amount you spend on Windows. Citrix is a competitor to VMWare (VMW), the hottest IPO in recent memory, and Friar says that the company’s recent acquisition of Xensource makes that a credible claim: “original equipment makers have been clamoring for a credible number two to VMware and Xensource seems to be filling this need.” Xensource should benefit from a recent agreement between itself and VMware to offer standards for interoperability between virtual machine software programs, says Friar. Friar has a $42 price target for Citrix.
BMC shares are worth $36, argues Friar. Right now, the stock trades at only 11x its enterprise value as a multiple of its projected free cash flow next year, which, she writes, is way below the software industry average of 17x.
Barrons is carrying the article.