BMO Capital analyst, Tim Long, reiterated his Market Perform rating on F5 Networks (NASDAQ: FFIV) after FFIV reported solid results and upside on guidance. F3Q revenues of $497 mm were in line with our/consensus estimate of $496 mm and EPS of $1.81 topped our/consensus $1.78/$1.79 estimates. The quarter was generally solid and product sales remained weak and slightly below expectations, though sales should improve as the refresh gains traction over the next few quarters. Strength in APAC and Japan were offset by weakness in the Americas related to softer carrier spending and weaker demand in EMEA, particularly in the U.K. Mix helped drive some gross margin upside and operating margins were better, benefitting from lower opex as management hired less than expected in the quarter. FY2016 pro forma EPS is increasing to $7.15 from $7.09 to reflect the EPS upside in the quarterly guidance. For FY17, the analyst is increasing EPS estimates to $8.10 from $8.03.

The analyst believes that "The quarter was not entirely clean given challenges in the U.S. and EMEA but the company is set up well over the next few quarters as the product refresh begins to roll out. There is now line of sight toward improving revenue trends and product growth is expected to turn positive in F1Q17."

The price target of $125 increases from $104.

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Shares of F5 Networks closed at $121.47 yesterday.