F5 (FFIV) Stock Sinks 12% on Supply Chain Warnings, Analyst Still Sees Positives

January 26, 2022 8:24 AM EST
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Price: $156.28 +0.62%

Rating Summary:
    24 Buy, 22 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 4 | Down: 15 | New: 18
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Shares of F5 Networks (NASDAQ: FFIV) are down 12% despite the company reporting better than expected Q1 earnings and revenue. This marked the fourth time the computer networking company has beat consensus earnings per share (EPS) estimates.

“Our customers’ need to grow and evolve the applications that support and drive their businesses led to strong demand for F5’s application security and delivery solutions, fueling 10% revenue growth in our first quarter,” said François Locoh-Donou, F5’s President and CEO.

However, F5 stock price sank after the company voiced its concerns over supply-chain constraints that could challenge its ability to meet demand. F5 cut its 2022 revenue guidance for $59 million.

F5 Networks reported Q1 EPS growth of 3.58%, or $2.89 per share, outshining the consensus estimates of $2.79 per share, and up from $2.59 per share a year ago.

The reported revenue was $687.1 million for the quarter ended December 2021, beating the analyst expectations by 1.19% and beating the $624.62 million reported in the year-ago period.

Software revenue at F5 climbed by 47%, while systems were up 1%. Analysts currently estimate F5 Networks’ earnings per share of $2.79 on $694.15 million for the coming quarter and $11.72 EPS on $2.82 billion in revenues for the current fiscal year.

BofA analyst Tal Liani lowered the price target to $265.00 per share from the prior $285.00 on the Buy-rated FFIV stock.

“We believe the stock should recover as the component issues improve throughout the year, and revenue and EPS growth accelerate,” Liani said in a client note.



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