NEW YORK (TheStreet) -- DA Davidson initiated coverage on F5 Networks (FFIV - Get Report) with a "buy" rating and set a $145 price target. The firm said the company has a dominant position in the application delivery controller market.
The stock was up 1.04% to $110.30 in pre-market trading on Wednesday.
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- The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 19.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FFIV has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.42, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, F5 NETWORKS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 61.74% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- F5 NETWORKS INC has improved earnings per share by 13.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, F5 NETWORKS INC increased its bottom line by earning $3.51 versus $3.45 in the prior year. This year, the market expects an improvement in earnings ($5.29 versus $3.51).
- You can view the full analysis from the report here: FFIV Ratings Report