Why 4 Beaten-Down Tech Stock Leaders May Be Massive Second-Half Winners

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Technology

Citrix Systems

This company has come into the spotlight as a potential takeover candidate, and its stock is down almost 10% this year. Citrix Systems Inc. (NASDAQ: CTXS) is leading the transition to software-defining the workplace, uniting virtualization, mobility management, networking and software as a service (SaaS) solutions to enable new ways for businesses and people to work better.

Citrix solutions power business mobility through secure, mobile workspaces that provide people with instant access to apps, desktops, data and communications on any device, over any network and cloud. Strategic mergers and acquisitions and internal development have expanded Citrix’s addressable markets beyond access to legacy Windows applications to include desktop and server virtualization, team collaboration and application networking.

Jefferies recently said this:

We re-ran a previous survey in order to assess intentions among Citrix Systems customers to convert limited-use term licenses purchased during March-April 2020 to long-term contracts. The survey results were supportive and indicated that on average organizations plan to convert 75% of their limited-use licenses to recurring contracts and that a further 75% of these conversions will be deployed as term licenses. We noted that current year 2021 revenue growth guidance stands at +3-4% and we think that it can ultimately land in the high-single digits on the back of conversions which could add 3-4p points to growth and the Wrike acquisition which could add another 2-3pts to growth. Additionally, we have increased confidence in the calendar $10 free-cash-flow per share goal. Moreover, we pointed out that the company trades toward the bottom-end of its 13-18x free-cash-flow range.

Jefferies has a $180 price target on Citrix Systems stock, which is well above the consensus target of $150.92. Monday’s final trade was at $116.87 a share.

Qualcomm

This stock has rolled over and is down almost 15% this year, but it remains among the BofA Securities US 1 top stock picks. Qualcomm Inc. (NASDAQ: QCOM) designs, develops and supplies semiconductors and collects royalties on wireless handheld devices and infrastructure based on its dominant position in CDMA and other related technology patents.