Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- F5 Networks
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 15.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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. To add to this, FFIV has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $148.56 million or 22.27% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.61%.
- F5 NETWORKS INC's earnings per share improvement from the most recent quarter was slightly positive. 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 $3.45 versus $2.97 in the prior year. This year, the market expects an improvement in earnings ($4.96 versus $3.45).
- The gross profit margin for F5 NETWORKS INC is currently very high, coming in at 85.50%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.70% trails the industry average.
F5 Networks, Inc. provides application delivery networking technology that optimizes the delivery of network-based applications, and the security, performance, and availability of servers, data storage devices, and other network resources in the Americas, EMEA, Japan, and the Asia Pacific. F5 has a market cap of $7.12 billion and is part of the technology sector and computer software & services industry. The company has a P/E ratio of 26.1, above the S&P 500 P/E ratio of 17.7. Shares are down 15.1% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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