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F5 Networks, Inc. (FFIV)

- NASDAQ
  • 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.
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  • 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
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  • 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).
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  • 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%.
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  • Thu, Jan. 22, 12:45 PM
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  • Thu, Jan. 22, 9:15 AM
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  • Wed, Jan. 21, 5:35 PM
    • Top gainers, as of 5:15 p.m.: NERV +16.8%. OKS +7.0%. NRP +3.8%. MDR +3.2%. TAC +2.7%.
    • Top losers, as of 5:15 p.m.: FFIV -15.2%. SLM -7.7%. ASPX -6.1%. XLNX -6.1%. NE -5.8%.
    | 5 Comments
  • Wed, Jan. 21, 4:29 PM
    • In addition to missing FQ1 revenue estimates (while beating on EPS), F5 (NASDAQ:FFIV) is guiding for FQ2 revenue of $465M-$475M and EPS of $1.48-$1.51, below a consensus of $478.9M and $1.53.
    • CEO John McAdam: "In addition to the seasonal softness we normally experience in the first quarter of a new fiscal year, product sales during the quarter reflected a marked decrease in the number of deals greater than $1 million." However, he insists "the number of large deals in the current pipeline is encouraging and indicates [F5] should see a resumption of the recent trend toward larger deals in [FQ2]."
    • FQ1 product revenue +10% Y/Y to $240.9M; services revenue +18% to $221.9M. Software revenue rose 44%.
    • $750M has been added to F5's buyback authorization, raising its available funds to $930.7M. $150M was spent on buybacks in FQ1, boosting EPS.
    • Smaller application delivery controller vendor Radware (NASDAQ:RDWR) is down 2% AH. Barclays' Jan. 14 downgrade of F5 was well-timed.
    • FQ1 results, PR
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  • Wed, Jan. 14, 11:16 AM
    • Barclays' Ben Reitzes: "We are lowering our rating on F5 (NASDAQ:FFIV) to Equal Weight based on our view that the risk/reward equation is balanced at current levels despite positive fundamentals." His target is still $136.
    • The downgrade comes ahead of F5's Jan. 21 FQ1 report. Shares go for 19x estimated FY15 (ends Sep. '15) EPS. The FY15 revenue growth consensus is at 13.5%.
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  • Nov. 10, 2014, 9:51 AM
    • Declaring its Project VIP network expansion effort ahead of schedule, AT&T has set a 2015 capex budget of $18B, down from 2014's $21B and below a prior forecast of $20B. The figure is equal to only 13% of AT&T's 2015 revenue consensus.
    • Telecom equipment and optical component makers, many of whom have already felt the effects of AT&T's subdued 2014 wireline capex, are off in early trading. CSCO -1.4%. ALU -4.8%. CIEN -6.6%. ADTN -7.8%. JNPR -2.5%. RKUS -2.1%. SONS -2.9%. FNSR -2.9%. JDSU -1.1%. RKUS -2.1%. XXIA -2%. FFIV -1.6%. ERIC -1.7%.
    • Cisco delivers its FQ1 report on Wednesday. The networking giant reported an 11% Y/Y FQ4 drop in service provider orders, thanks to both weak demand and share loss.
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  • Oct. 29, 2014, 4:31 PM
    • Along with its FQ4 report, F5 (NASDAQ:FFIV) announces CEO John McAdam plans to retire at the end of FY15 (ends Sep. '15). The board will search for a successor to McAdam, who has been CEO since 2000.
    • FQ1 guidance is in-line: Revenue of $460M-$470M and EPS of $1.46-$1.49 vs. a consensus of $464.9M and $1.48.
    • FFIV -2.2% AH. FQ4 results, PR
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  • Oct. 28, 2014, 2:29 PM
    • In addition to soundly beating Q3 estimates, Radware (NASDAQ:RDWR) guided on its CC (transcript) for Q4 revenue of $59M-$61M and EPS of $0.25-$0.28, above a consensus of $58.4M and $0.24.
    • CEO Roy Zisapel stated Radware is seeing strong demand for both its application delivery controller (ADC) and cybersecurity offerings. ADC sales have been boosted by strong uptake for the recently-launched Alteon NG platform, which (like some rival offerings) provides a slew of performance-optimization and security services to go with basic load balancing.
    • ADC market leader F5 (NASDAQ:FFIV) is rallying ahead of tomorrow's FQ4 report. The Nasdaq is up 1.3%
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  • Oct. 20, 2014, 2:28 PM
    • Cisco (CSCO -1.7%), VMware (VMW -1.5%),  F5 (FFIV -1.5%), NetApp (NTAP -1.5%), Teradata (TDC -3.3%), and SGI (SGI -3.5%) have joined several other enterprise tech names in declining after IBM and SAP each posted disappointing Q3 reports. The Nasdaq is up 1% on the day.
    • IBM provided a smorgasbord of bad news: A Q3 miss, soft full-year guidance, the pulling of a $20/share 2015 EPS target, a 15% Y/Y hardware revenue decline, and a 7% Y/Y services backlog drop. In addition, the IT giant said it "saw a marked slowdown in September in client buying behavior."
    • Citing the impact of a shift in customer spending towards subscription-based cloud apps from on-premise software (typically paid through an up-front license fee), SAP slashed its full-year op. profit forecast. Q3 revenue was slightly below consensus, and EPS in-line.
    • VMware reports tomorrow, F5 on Thursday, SGI on Oct. 29, and Teradata on Nov. 6.
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  • Oct. 10, 2014, 10:58 AM
    • Telecom equipment makers and their chip/component suppliers are seeing more pain after Juniper (JNPR -7.5%) and Procera (PKT -32%) issued Q3 warnings (I, II), the latest bad earnings news for an industry that has seen plenty due to soft wireline capex. A few enterprise-focused networking vendors are also having a rough day.
    • Cisco (CSCO -3.1%) has fallen below $23.50, and Alcatel-Lucent (ALU -4.3%) below $2.50. Other decliners: CIEN -4.7%. JDSU -4.6%. FFIV -5.3%. ANET -7%. RKUS -5.7%. SONS -4.4%. INFN -2.4%. CYNI -3.5%. AMCC -10%. PMCS -3.4%. NPTN -7.7%.
    • Analysts are defending Juniper, arguing (in remarks that also have implications for peers) bad news has been priced in and that telecom capex is likely to improve in 2015. Bulls have argued Web/mobile traffic growth and SDN/NFV investments will ultimately boost capex, in spite of industry service revenue pressures.
    • The Nasdaq as a whole is down 1.2%. Chip stocks are off sharply following Microchip's warning and prediction of an industry correction.
    • Yesterday: Telecom equipment stocks slump as capex worries persist
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  • Oct. 9, 2014, 1:24 PM
    • F5 (NASDAQ:FFIV) is underperforming after Riverbed cut its Q3 guidance on account of soft WAN optimization and virtual application delivery controller (ADC) sales. Riverbed's virtual ADCs compete against F5's physical and virtual ADCs.
    • Riverbed's cut comes a day after A10 Networks (another ADC vendor) issued a Q3 warning of its own.
    • F5's FQ4 report is expected later this month. The company posted an FQ3 beat in July on the back of strong security hardware sales and growing uptake for its Good, Better, Best bundles.
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  • Sep. 29, 2014, 9:16 AM
    • With shares up 33% YTD going into today, Baird has downgraded F5 (NASDAQ:FFIV) to Neutral. Its target remains at $125.
    • In addition to the run-up, Baird cites potential weakness in carrier demand. Plenty of telecom equipment and component vendors have reported being affected by soft North American capex.
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Company Description
F5 Networks Inc provides Application Delivery Networking (ADN) technology that secures and optimizes the delivery of network-based applications and the security, performance and availability of servers, and other network resources.
Sector: Technology
Country: United States