F5 Networks (FFIV) cut at BofA on system risks

F5 Networks (NASDAQ: FFIV) was cut to Underperform from Neutral with a new price target of $160 per share, down from $165 by BofA in a note Thursday.

Analyst Tal Liani told investors that they see software and system risks potentially posing challenges for the company.

"F5’s stock has underperformed NASDAQ in four of the last five years and is up only 6% YTD vs. NASDAQ’s 23%," explained Liani. "We expect revenue growth to remain muted, at -2% and +4% over the next two years, and believe the stock may continue to underperform our coverage universe."

"We highlight a few positives for the company, yet flag two main risks that may keep a lid on the stock. We believe challenges to software and systems pose risks to the company’s FY24/FY25 revenue growth guidance," he added.

The positives include the company's margin improvement and supporting EPS growth. However, BofA believes the outlook continues to remain timid, with flat to low-single-digit declines in revenue and 6% YoY growth in EPS, below Street expectations.

By Sam Boughedda

You May Also Be Interested In

• BofA Securities Starts Dollarama Inc. (DOL:CN) (DLMAF) at Buy
• Adobe (ADBE) PT Lowered to $245 at TD Cowen
• The Lovesac Co. (LOVE) PT Raised to $20 at DA Davidson Following Q1 Results