Emerging markets, particularly those in the Asia-Pacific region, are also expected to deliver double-digit growth figures in the years to come. Finally, as competition amongst major carriers increases, corporate spending on customer care and billing software will also rise; with the largest customer base amongst its peers, Amdocs Limited (NYSE:DOX) is particularly well positioned to benefit from the situation.
Apples and oranges
Citrix Systems, Inc. (NASDAQ:CTXS) is one of the world’s leading developers and suppliers of application delivery and management software and services. Although financial performance hasn’t been very good lately, the future looks brighter, mainly because further downside would require very bad managerial decisions. With its stock trading close to a 2 year low at $63, an attractive entry point is open for investors. Bullish projections estimate average annual EPS growth rates around 23% over the next five years for Citrix Systems, Inc. (NASDAQ:CTXS).
However, trading at double the industry average valuation in relation to its earnings, is this stock a buy? I´d say it could be one for the long-term, especially.
Going forward, the company will benefit from the ongoing trend towards desktop virtualization, one of its core products. Analysts calculate that this process could impact 600 million desktop users in corporate environments alone. Continuous innovation in this and other fields should keep the company ahead of the competition as demand rises.
Cloud infrastructure and networking is another sector on which Citrix Systems, Inc. (NASDAQ:CTXS) continues to focus. The NetScaler product suite, in particular, remains the most important growth driver for the Cloud Infrastructure and networking segment, while several acquisitions (like that of ShareFile) will help increase exposure to a wider client base and broaden the product offering. In the years to come, constant innovation and increasing demand should work as additional catalysts.
Bottom line
After a succinct analysis, my conclusion is that all three of the companies above, J2 Global Inc (NASDAQ:JCOM), Citrix Systems, Inc. (NASDAQ:CTXS), and Amdocs Limited (NYSE:DOX), comprise good investments for long-term stockholders. However, if I had to choose one, J2 Global Inc (NASDAQ:JCOM) would be my pick, mainly due to its combination of strong growth prospects, a solid business model and a reasonable valuation.
Damian Illia has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Damian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article 3 Business Software Stocks to Watch originally appeared on Fool.com is written by Damian Illia.
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