Cisco (CSCO) Moving Out of L4-7, May Set Sights on M&A In Sector (FFIV) (CTXS) (RDWR)
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Price: $24.68 --0%
Rating Summary:
32 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 2 | New: 2
Rating Summary:
32 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 2 | New: 2
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Cisco (NASDAQ: CSCO) is ceasing development in the L4-7 application delivery business, according to reports from CRN.com.
The news is an incremental positive for the remaining vendors like F5 (NASDAQ: FFIV), Radware (NASDAQ: RDWR), Citrix (NASDAQ: CTXS) and A10 networks, note analysts at Wedbush. Cisco had 13 percent of the market in the first quarter of 2012. F5 and Radware are well positioned to win away Cisco's customers given their expertise in running high-end, enterprise data centers, Wedbush notes.
But Cisco may not be done in the space. Given that L4-7 is a key technology enabling the shift to network-based computing, Wedbush thinks Cisco have to revisit the sector through M&A.
"Given its offshore cash of $42.5bn and a commitment to a dividend, limiting the use of domestic cash of $6.2bn, Tel Aviv-based Radware offers a compelling product set," analyst Rohit Chopra said. "The company could also benefit from technologies at A10. Citrix and F5 offer scale, but the given their size, the transaction may not be possible with the existing Cisco balance sheet."
Wedbush maintained their Outperform rating and price target of $21 on CSCO.
For an analyst ratings summary and ratings history on Cisco click here. For more ratings news on Cisco click here.
Shares of Cisco closed down 0.6 percent to $19.05, F5 rose 4 percent, Citrix fell 0.6 percent and Radware fell 1.3 percent.
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The news is an incremental positive for the remaining vendors like F5 (NASDAQ: FFIV), Radware (NASDAQ: RDWR), Citrix (NASDAQ: CTXS) and A10 networks, note analysts at Wedbush. Cisco had 13 percent of the market in the first quarter of 2012. F5 and Radware are well positioned to win away Cisco's customers given their expertise in running high-end, enterprise data centers, Wedbush notes.
But Cisco may not be done in the space. Given that L4-7 is a key technology enabling the shift to network-based computing, Wedbush thinks Cisco have to revisit the sector through M&A.
"Given its offshore cash of $42.5bn and a commitment to a dividend, limiting the use of domestic cash of $6.2bn, Tel Aviv-based Radware offers a compelling product set," analyst Rohit Chopra said. "The company could also benefit from technologies at A10. Citrix and F5 offer scale, but the given their size, the transaction may not be possible with the existing Cisco balance sheet."
Wedbush maintained their Outperform rating and price target of $21 on CSCO.
For an analyst ratings summary and ratings history on Cisco click here. For more ratings news on Cisco click here.
Shares of Cisco closed down 0.6 percent to $19.05, F5 rose 4 percent, Citrix fell 0.6 percent and Radware fell 1.3 percent.
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