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F5 Networks: Key Challenges To Overcome

7:39 pm ET, 23 Jan 2018

F5 Networks (NASDAQ: FFIV) is set to release earnings results on Wednesday after market close.   According to Finstead Research, FFIV price upside is -11.07% (visit Finbot and type "FFIV upside" or "FFIV price target").  

There are a few things we'd like to bring to your attention prior to the earnings announcement. 

Competitive landscape for F5 remains challenging.  Cisco is the greatest threat to F5, because it dominates the networking industry.  We believe that F5’s technology will remain superior over Cisco's; however, Cisco's presence in the market and its sales execution engine will likely make a dent on F5.   

Other companies such as Citrix, Juniper, Checkpoint, Barracuda also have a strong technology that could pose a threat to F5. 

F5 remains acquisitive in the networking space. The frequent acquisitions are often a distraction to its management, which impacts organic growth.  This may not be a sustainable way to grow a business. 

We're also concerned that F5's business remains fairly concentrated on the American market; approximately 43% of revenue came from outside the U.S.  In contrast, Cisco is much better represented in the international markets.  

Over the last year, FFIV returned +1.23%. This return is lower than Business Software & Services Industry (27.34%), Technology Sector (28.47%), and S&P 500 (25.34%) returns.

F5 Networks, Inc. (FFIV) Stock Guide

Updated at: 5:59 pm ET, 13 Nov 2020

Before we start: if you're looking for FFIV stock price, you can quickly find it out by visiting Finny and typing "FFIV quote". If you're looking for a quick scoop on FFIV stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "FFIV". You'll get all this info in one place. Or you can just type "FFIV news" to get the latest stock news.

Looking to buy or sell F5 Networks, Inc. (FFIV)? Interested in getting the full scoop on FFIV, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this FFIV stock guide, we'll address key questions about FFIV, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are FFIV earnings?
2. When is FFIV earnings date?
3. What is FFIV stock forecast (i.e., prediction)?
4. FFIV buy or sell? What is FFIV Finny Score?
5. What are the reasons to buy FFIV? Why should I buy FFIV stock?
6. What are the reasons to sell FFIV? Why should I sell FFIV stock?
7. What are FFIV key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are FFIV earnings?

FFIV trailing 12-month earnings per share (EPS) is $5.01.

2. When is FFIV earnings date?

FFIV earnings date is January 25, 2021.

Analyst Predictions

3. What is FFIV stock forecast (i.e., prediction)?

Based on FFIV analyst price targets, FFIV stock forecast is $161.44 (for a year from now). That means the average analyst price target for FFIV stock is $161.44. The prediction is based on 22 analyst estimates.

The low price target for FFIV is $124.00, while the high price target is $190.00.

FFIV analyst rating is Hold.

Analysis

4. FFIV buy or sell? What is FFIV Finny Score?

#{finnyScore:43}Our quantitative analysis shows 3 reasons to buy and 4 reasons to sell FFIV, resulting in Finny Score of 43.

5. What are the reasons to buy FFIV? Why should I buy FFIV stock?

Here are the reasons to buy FFIV stock:

  • F5's security business has been gaining some traction among existing customers.
  • The upcoming hardware refresh should provide a significant performance boost to the hardware-based ADC segment.
  • The company’s profitability and strong balance sheet provide a solid foundation for potential acquisitions in adjacent fields.
  • FFIV quarterly revenue growth was 4.10%, higher than the industry and sector average revenue growth (2.50% and 0.53%, respectively). See FFIV revenue growth chart.
  • FFIV profitability is improving. The YoY profit margin change was 0.86 percentage points. See FFIV profitability chart.
  • FFIV cash to debt ratio is 1.66, higher than the average industry (0.19) and sector (0.17) cash to debt ratio. See FFIV cash to debt chart.

6. What are the reasons to sell FFIV? Why should I sell FFIV stock?

Let's look at the reasons to sell FFIV stock (i.e., the bear case):

  • The company relies on sales in the ADC market segment for 98% of its product revenue. Any technological disruption or macroeconomic changes will disproportionately affect F5's revenue.
  • F5 is not seen as an innovator in software-defined networking.
  • F5’s premium pricing advantage (derived from its market leader position) is under threat from pure cloud application deployments and developments that rely on a backed-in solution.
  • FFIV stock price ($159.46) is close to the 52-week high ($159.66). Perhaps now is a good time to sell? See FFIV price chart.
  • FFIV PEG ratio (P/E adjusted for growth) is 5.33, which is high compared to its industry peers’ PEG ratios. See FFIV PEG chart.
  • FFIV short share of float is 6.88%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See FFIV short share of float chart.
  • FFIV short interest (days to cover the shorts) ratio is 5.78. The stock garners more short interest than the average industry, sector or S&P 500 stock. See FFIV short interest ratio chart.

Key Stats

7. What are FFIV key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for FFIV:

Metrics FFIV
Price $162.81
Average Price Target / Upside $161.44 / -0.84%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Software - Infrastructure
Sector Technology
Number of Employees 4,409
Market Cap $9.74B
Forward P/E Ratio 14.56
Price/Book Ratio 4.14
Revenue (TTM) $2.35B
YoY Quarterly Revenue Growth 4.10%
Profit Margin 13.08%

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