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F5 Needs to Show More Consistency

Stocks in this article: FFIV CSCO CTXS RVBD

NEW YORK ( TheStreet) -- Business leaders are taught that any market considered worthwhile is assured of attracting plenty competition. In that regard, either the management at F5 Networks (FFIV) completely ignored this lesson, or worse, they underestimated their rivals.

With the stock trading today at around $95, the Street has staggered and impressed by F5's 6-month performance, which began after shares bottomed at a price of $67.53 last summer. The thing to remember here is in February 2013, F5 shares traded as high as $108 a share. Despite the company's 40% gains, shares are still down 12% in the trailing twelve months. This, however, should not be cited as a valid reason to buy the stock.

It seems investor are now trying to reconcile the direction of the company. Management still has not sufficiently outlined who and what F5 is. There continues some "misdirection" (I won't say confusion) within the company around next generation networking technologies such as software defined networking, an area where Cisco (CSCO) has begun to dominate.

[Read: Taking Solace in an Earnings Challenged Coach]

I can't forget that F5, even after it challenged Cisco by picking off LineRate, failed to exploit its market advantage in areas like application delivery control. This despite Cisco bailing on that market altogether and opening the door for F5 to rule the industry. Instead, F5's management failed to produce the sort of leverage the company needed to grow margins and seize market share. They couldn't shoot fish in barrel.

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