Goldman Sachs Maintains a 'Neutral' on F5 Networks (FFIV); Better Services Revenues and Gross Margin Win the Day
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Price: $403.20 -3.08%
Rating Summary:
21 Buy, 25 Hold, 4 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
21 Buy, 25 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Goldman Sachs maintains a 'Neutral' on F5 Networks (NASDAQ: FFIV) price target raised from $96 to $108.
Goldman analyst said, "Continued strong services revenue growth drove the 1QFY12 revenue beat (product revenue was down 0.5% qoq) and was the primary reason for better-than-expected guidance. In line with F5’s reiterated product revenue guidance for 2QFY12, we estimate that product revenue yoy growth will reaccelerate given (1) 1QFY12’s book-to-bill was above 1 vs. 1QFY11’s below 1, (2) strong sales pipeline and normal linearity in 1Q, (3) following 1Q’s 31% yoy telco revenue growth F5 faces an easier comparable in 2Q, (4) 2Q will be the third full quarter of VIPRION 2400 sales (VIPRON family tripled revenue in 1Q), and (5) F5’s application firewall (ASM) had a record 1Q and F5 is aggressively pursuing security. Despite this, our FY12 product revenue growth is only 16% yoy and total revenue only meets F5’s guided 20%+ growth yoy on better services revenue growth."
"We maintain our Neutral rating, but raise our target P/E multiple to 23X (prior 21X) on comp multiple increases and visibility provided by stronger services revenue growth. Our FY12/13/14 revenue estimates go to $1.38/$1.65/$1.92 bn from $1.36/$1.56/$1.80 bn and EPS to $4.46/$5.37/$6.40 from $4.35/$5.16/$6.02."
For an analyst ratings summary and ratings history on F5 Networks click here. For more ratings news on F5 Networks click here.
Shares of F5 Networks closed at $108.46 yesterday.
Goldman analyst said, "Continued strong services revenue growth drove the 1QFY12 revenue beat (product revenue was down 0.5% qoq) and was the primary reason for better-than-expected guidance. In line with F5’s reiterated product revenue guidance for 2QFY12, we estimate that product revenue yoy growth will reaccelerate given (1) 1QFY12’s book-to-bill was above 1 vs. 1QFY11’s below 1, (2) strong sales pipeline and normal linearity in 1Q, (3) following 1Q’s 31% yoy telco revenue growth F5 faces an easier comparable in 2Q, (4) 2Q will be the third full quarter of VIPRION 2400 sales (VIPRON family tripled revenue in 1Q), and (5) F5’s application firewall (ASM) had a record 1Q and F5 is aggressively pursuing security. Despite this, our FY12 product revenue growth is only 16% yoy and total revenue only meets F5’s guided 20%+ growth yoy on better services revenue growth."
"We maintain our Neutral rating, but raise our target P/E multiple to 23X (prior 21X) on comp multiple increases and visibility provided by stronger services revenue growth. Our FY12/13/14 revenue estimates go to $1.38/$1.65/$1.92 bn from $1.36/$1.56/$1.80 bn and EPS to $4.46/$5.37/$6.40 from $4.35/$5.16/$6.02."
For an analyst ratings summary and ratings history on F5 Networks click here. For more ratings news on F5 Networks click here.
Shares of F5 Networks closed at $108.46 yesterday.
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