Fri, Nov. 13, 10:00 AM
- William Blair and JMP have each downgraded F5 (NASDAQ:FFIV) to Market Perform following yesterday's analyst day (webcast). Shares have made new 52-week lows.
- William Blair's Jason Ader considers further downside limited, but also considers it hard to find a near-term catalyst. "[T]he stock is stuck in a purgatorial state between growth and value, and we believe management is overly optimistic about the business’s true growth prospects amid the status quo - a phenomenon that we believe is contributing to the recent spate of executive departures.”
- Likewise, JMP's Erik Suppiger sees limited catalysts, save for "an upgrade cycle that will be one-time in nature," and isn't expected until the second half of FY16 (ends Sep. '16). He adds the adoption of public cloud platforms such as Amazon Web Services and Microsoft Azure is "serving as a net headwind to F5, as enterprises migrate more workloads to these providers, potentially reducing the total market opportunity for F5.”
- F5 sold off hard last months after providing an FQ4 revenue miss and soft FQ1 guidance. On the earnings call (transcript), the guidance was blamed on seasonality, along with caution related to budget uncertainty stemming from forex and "lingering macro issues." When asked about cloud-related pressure, the company insisted cloud adoption is an opportunity, as F5's ADCs enable app/service portability and enforce consistent security and access policies for hybrid cloud deployments and enterprises using multiple public clouds.
- Today's selloff comes as Cisco falls due to the light FQ2 guidance it provided with an FQ1 beat. Cisco noted enterprise orders were a weak spot.
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Tue, Oct. 6, 9:16 AM
- Believing consensus estimates are too high and that the company is likely to cut guidance over the next 6 months, Citi's Jim Suva has launched coverage on F5 (NASDAQ:FFIV) with a Sell rating and $105 target.
- Suva notes he's the only analyst with a bearish rating on F5. He has also started Cisco at Buy, and Juniper at Neutral.
- F5 has fallen to $116.22 premarket. Suva's coverage comes as smaller F5 rival Radware tumbles in response to a Q3 warning. F5's FQ4 (calendar Q3) report arrives on Oct. 28.
- Yesterday: F5 partners with FireEye
Tue, Oct. 6, 9:15 AM
Mon, Oct. 5, 11:11 AM
- Citing fears about increased competition, Piper's Andrew Nowinski has downgraded FireEye (NASDAQ:FEYE) to Neutral, and cut his target by $23 to $37.
- Nowinski: "Our downgrade is primarily due to increasing competition, though we are also concerned with conflict within the channel and recent executive turnover." His target translates into a 6.3x 2016E EV/sales ratio.
- Palo Alto Networks, Cisco, and others have rolled out threat-prevention products and services over the last year that take aim at FireEye. The company is still generally seen as a technology leader with regards to solutions protecting networks and endpoints from malware and zero-day threats, and in probing attacks that have already occurred.
- Separately, FireEye has announced it's partnering with F5 (FFIV +1.8%), the top player in the application delivery controller (ADC) market and also a security hardware vendor, to provide integrated solutions.
- The joint solutions combine application delivery and content security functions, including "network segmentation and policy management, protocol conformance, DDoS mitigation, SSL inspection, advanced threat protection, intrusion prevention, threat intelligence, forensics, and analytics." FireEye/F5 also promise to provide better visibility into encrypted traffic, and to leverage the health-monitoring and load-balancing features of F5's BIG-IP platform.
- FireEye announced a security services partnership with HP earlier this year, as well as a threat intelligence-sharing partnership with firewall/security appliance vendor Check Point.
Tue, Sep. 22, 11:57 AM
- "We believe F5 (FFIV -3.1%) is experiencing slowing growth in its core ADC product resulting from factors both cyclical and secular," says analyst Ryan Hutchinson, downgrading to Neutral from Buy. He takes note of the conclusion of the Cisco ACE replacement, and the long-term revenue headwind from virtual appliance sales.
- Then there's recent market share data from Gartner showing the broader ADC market growing 4.7-6.5% per year - F5, says Hutchinson, has become a "share donor," losing 130 bps of revenue share between Q1 and Q2 this year, and 60 bps Y/Y.
Mon, Aug. 3, 9:52 AM
- Buckingham Research has downgraded F5 (NASDAQ:FFIV) to Neutral. The firm had upgraded F5 to Buy on Jan. 22, after shares plunged on account of a revenue miss and soft guidance. F5 had risen 23% since.
- The downgrade comes 12 days after the ADC/security hardware and software vendor jumped following an FQ3 beat and strong FQ4 EPS guidance.
Thu, Jul. 23, 2:56 PM
- Application delivery controller/security hardware vendor F5 (FFIV +6.9%) beat FQ3 estimates on the back of strong software sales, and provided above-consensus FQ4 EPS guidance (revenue was in-line). With growing 100G long-haul optical deployments serving as a tailwind, optical networking hardware vendor Infinera (INFN +9.6%) beat Q2 estimates and provided strong Q3 guidance.
- Also: Optical component vendor Alliance Fiber (AFOP +16%) beat estimates and offered healthy guidance. Strong datacom component demand from cloud service providers was cited.
- A slew of telecom/networking equipment, component, and chip vendors are higher on a day the Nasdaq is down 0.4%. The list includes Infinera rival Ciena (CIEN +1.6%), F5 rival Radware (RDWR +3.3%), and Alliance Fiber peer NeoPhotonics (NPTN +4.7%). Others include Ciena acquisition target Cyan (CYNI +1.8%) and chipmakers Cavium (CAVM +3.6%), PMC-Sierra (PMCS +3%), EZchip (EZCH +2.8%), and InPhi (IPHI +3.7%).
- Broader gains for chip stocks - the Philadelphia Semi Index is up 1.7% after selling off hard yesterday - are likely helping the chipmakers. Cisco, meanwhile, is up 2.2% after striking a deal to sell its share-losing set-top unit to Technicolor.
- During F5's earnings call, new CEO Manny Rivelo stated F5 now leads the virtual (software-based) ADC market, which has sometimes been seen as a major long-term threat to its ADC hardware business, and noted the company saw a 20% Y/Y increase in its deferred revenue balance (driven by services/subscription growth) to $743M. He also disclosed sales chief Dave Feringa is stepping down on Oct. 1; his successor will be named shortly.
- On Infinera's call, CEO Tom Fallon mentioned the company has now invoiced 12 customers for its new Cloud Xpress data center interconnect platform, up from 7 three months ago. For now, long-haul optical still makes up over 90% of revenue - Cloud Xpress growth, the pending launch of a metro aggregation product, and (provided it's approved) the Transmode acquisition should change that. 3 customers accounted for over 10% of Q2 revenue.
Wed, Jul. 22, 4:14 PM
- In addition to beating FQ3 estimates, F5 (NASDAQ:FFIV) is guiding for FQ4 revenue of $500M-$510M and EPS of $1.72-$1.75 vs. a consensus of $504.7M and $1.71.
- Software (virtual ADC/add-on module) sales were a strong point, as were enterprise and U.S. federal demand. Software accounted for over a third of FQ3 product revenue.
- Key numbers: FQ3 product revenue +5% Y/Y to $248.8M; services revenue (driven by past product sales) +15% to $234.8M. GAAP operating expenses +10% to $257.8M. $150M was spent on buybacks. F5 ended FQ3 with $1.35B in cash/investments, and no debt.
- Shares have risen to $125.03 AH.
- FQ3 results, PR
Mon, Jun. 29, 8:13 AM
- Citing valuation's Piper's Troy Jensen has downgraded F5 (NASDAQ:FFIV) to Neutral. His target is $130.
- Shares have fallen to $120.62 premarket. The application delivery controller/security hardware vendor trades for 16.6x an FY16 (ends Sep. '16) EPS consensus of $7.25.
- Citi downgraded F5 on June 1. FQ3 results arrive on July 22.
Thu, Apr. 23, 12:49 PM
- Down AH yesterday after providing soft FQ3 sales guidance (and in-line EPS guidance) to go with an FQ2 beat and naming EVP Manny Rivelo its new CEO, F5 (NASDAQ:FFIV) has reversed course today. With shares having been hammered in January due to a revenue miss and soft guidance, expectations were relatively low.
- The news has triggered both an upgrade to Buy from Needham, and a downgrade to Neutral from MKM. Needham expects stronger 2H15 growth, aided by easier comps and rising telecom capex. MKM is worried about both growth and the CEO change.
- Wedbush sees 3 reasons to remain bullish. "1) Over the past 4-6 [quarters], F5 has demonstrated the capability to deftly manage the shift from hardware- to more software-based services; 2) F5’s revenue stream is increasingly more diversified to recurring and non-recurring revenue streams. 3) A stabilizing FX environment could prove a positive catalyst for revenue growth, while creating a favorable advantage for Opex and EPS."
- JMP asserts F5's ADCs remain "central to next-gen data center architectures," and sees the company's tiered pricing model (i.e. Good, Better, Best) and rising virtual (software-based) ADC sales boosting margins. It also sees further opportunity to benefit from Cisco's 2012 ADC market exit. Cisco ADC partner Citrix just reported soft networking division numbers.
Wed, Apr. 22, 4:52 PM
- Along with its FQ2 results, F5 (NASDAQ:FFIV) has announced Manny Rivelo, the company's EVP of strategic solutions (has been responsible for "strategic development, product management, and global marketing strategy"), is its new CEO, effective July 1. He's also joining the board.
- Rivelo will replace long-time CEO John McAdam, who announced plans to retire last October. McAdam will remain with F5 as chairman. Al Higginson, chairman since 2004, will move over to the role of lead independent director.
- Though F5 beat FQ2 estimates (more on EPS than revenue), it's guiding for FQ3 revenue of $475M-$485M, below a consensus of $489.4M. EPS guidance of $1.57-$1.60 is in-line with a $1.59 consensus. Not surprisingly (given the issues faced by many enterprise tech peers), F5 is blaming a strong dollar and its impact on EMEA/Asia-Pac demand.
- The ADC/security hardware vendor saw "solid sequential and year-over-year growth in sales to U.S. service providers and enterprise customers" in FQ2, aided by a rebound in $1M+ deal activity. However, EMEA/Asia-Pac sales were below expectations. The deferred revenue balance rose a healthy 23% Y/Y to $721M.
- Shares have fallen to $115.90 AH.
- FQ2 results, PR
Mon, Mar. 9, 9:52 AM
- Barclays has downgraded F5 (NASDAQ:FFIV) to Underweight, albeit while keeping its $114 target intact. Gigamon (NYSE:GIMO) has been upgraded to Overweight, with its target hiked by $5 to $26.
- The F5 downgrade follows a January plunge caused by a revenue miss and soft guidance. Wedbush offered a more positive take on the ADC/security hardware vendor last week, praising its diversification efforts, valuation, and ongoing mix shift towards software and software-based services. Software revenue rose 44% Y/Y in calendar Q4 (compares with 14% total revenue growth).
Fri, Jan. 23, 12:27 AM
- Stifel cut F5 (NASDAQ:FFIV) to Hold on account of the company's FQ1 revenue miss and light FQ2 guidance. But Buckingam Research upgraded to Buy due to the resulting nosedive, and a few other sell-side firms defended the ADC/security hardware vendor, generally arguing non-ADC growth opportunities will help the company rebound.
- D.A. Davidson's Mark Kelleher: "F5 offers the most complete application delivery platform in the market. Its [TMOS OS] provides the foundation for a wide variety of Application Delivery modules, allowing the company to continuously expand its total addressable market ... we expects its security portfolio to drive significant growth."
- William Blair's Jason Ader: "We see this as an execution blip for F5 rather than anything reflective of a weak macro environment or structural issues in the business ... In retrospect, we believe that management was overly optimistic on the heels of a stellar second half of fiscal 2014 and misread timing on a handful of large deals in the seasonally soft first quarter."
- Credit Suisse's Vlad Rom is upbeat about F5's exposure to enterprise app deployments and (through its Diameter signaling offerings) 4G buildouts, as well as its security growth. But he cautions "security/wireless product ramps are necessary to drive mid-teens revenue growth," given the core ADC market's growth is set to slow to the mid-single digits. Barclays' Ben Reitzes raised similar concerns.
- Pac Crest's Brent Bracelin notes shares now go for only 10x his 2016 free cash flow estimates on an EV/FCF basis. They finished Thursday trading down 10%.
Thu, Jan. 22, 12:45 PM
Thu, Jan. 22, 9:15 AM
F5 Networks Inc is a developer and provider of software-defined application services designed to ensure that applications delivered over Internet Protocol (IP) networks are available to any user, anywhere, anytime, on any device and on any network.
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