Cisco (CSCO) Making Moves in Layer 4-7, Could Impact F5 (FFIV), Radware (RDWR)

October 15, 2012 10:54 AM EDT Send to a Friend
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Analysts at Oppenheimer commented on Cisco (NASDAQ: CSCO) Monday, which could have positive implications for Citrix (NASDAQ: CTXS) and negative implications for F5 (NASDAQ: FFIV) and Radware (NASDAQ: RDWR).

Analyst Ittai Kidron said contacts suggest Cisco is close to signing an OEM agreement with Citrix for its NetScaler ADC.

"From a technology standpoint, NetScaler is a high-quality solution relative to Cisco's discontinued ACE and one that Cisco can sell as a standalone ADC to enterprise/SMBs," the analyst comments. "While OEM relationships are tough to execute, Cisco has a strong sales force and now a strong product to sell. We see little go-to-market conflict as we expect Cisco to focus on standalone solutions while Citrix will focus on bundling with its own solutions."

F5's enterprise/SMB sales could come under pressure and so could Radware's, Kidron said. Longer term, Kidron believes Cisco could move to acquire NetScaler and he sees near-term headwinds for F5/Radware.

Cisco could buy NetScaler for $1.5B-$2.1 billion or 5-7x FY12 revenue estimate for Citrix's NetScaler business.

The analyst maintained an Outperform rating and price target of $22.00 on Cisco.

For an analyst ratings summary and ratings history on Cisco click here. For more ratings news on Cisco click here.

Shares of Cisco closed at $18.41 yesterday.


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