Goldman Sachs Downgrades F5 Networks, Inc. (FFIV) to Sell, Cites Cyclical Risks

October 8, 2010 6:56 AM EDT
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Goldman Sachs downgrades F5 Networks, Inc. (Nasdaq: FFIV) from Neutral to Sell, and sees 18% downside to their $80 price target.

The firm said cyclical risks is not reflected in the rich multiple which now stands at 32x, driven by its position as a key Cloud vendor and a significant M&A premium. "However, our analysis suggests that almost 85% of FFIV’s growth has been driven by the cyclical server refresh and share gains, rather than the Cloud build-out. This puts its growth trajectory in 2011, and thus the multiple, at risk," the firm notes.


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