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F5 Networks, Inc. : FFIV - Time to Buy?

F5 Networks, Inc. develops, markets, and sells application delivery networking products that optimize the security, performance, and availability of network applications, servers, and storage systems. The company's primary application delivery technology is Traffic Management Operating System (TMOS) that enable company's products to intercept, inspect, and act on the contents of traffic from virtually each type of Internet Protocol-enabled application. It offers Local Traffic Manager, which provides intelligent load-balancing, traffic management, and application health checking; BIG-IP DNS that automatically directs users to the closest or best-performing physical, virtual, or cloud environment; Advanced Firewall Manager, a network firewall; and Application Security Manager, an Web application firewall that provides comprehensive, proactive, and application-layer protection against generalized and targeted attacks. F5 Networks, Inc. was founded in 1996 and is headquartered in Seattle, Washington.

Analysis : FFIV

  • F5 Networks (FFIV) reported its 1st quarter earnings on January 23rd, 2019. Wall street was expecting an EPS of $2.54 on a revenue of $546.7 Million. The company reported $2.71 on a revenue of $543.8 Million. However the company lowered its expectations for the upcoming quarter. F5 expects EPS between $2.53 and $2.56; revenue between $543M and 553M. Analysts expect EPS of $2.57 on a revenue of 552.5M.

  • Even though the stock ramped up from $150 to $175 after the earning release, stock price has been on a decline for the last few weeks. FFIV lost approximately 15% of its value between Feb 25 and Mar 14, 2019.

  • Where is the stock heading from here? Would the same downward momentum continue?. F5 Networks is a great tech stock for investors. Technical analyst may foresee an upward momentum as the stock appears to form a double bottom, with an RSI close to 30. Analysts allude the primary reason for the decline to its recent announcement regarding acquiring NGNX for $650 Million. Even though this acquisition is likely to bolster FFIV in its segment, it is highly likely to impact its earning proposition in the upcoming quarters. Our proprietary pattern recognition system sees a continued downward momentum, until the stock reaches $135. In other words, this stock has not reached a true oversold state yet!

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  • Financial information cited in this article are taken from Yahoo Finance (http://www.yahoo.com/finance); EPS data is taken from Zacks Research (http://www.zacks.com); some of the definitions have been taken from Wikipedia (www.wikipedia.com)

     

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