The IT services and consulting business received an upgrade from William Blair to "outperform" from "market perform". The investment bank said its research showed the company had turned a corner following a rough patch in mid-2013.
William Blair raised its revenue estimate for fiscal 2014 to between $1.653 billion and $1.669 billion with net income in the range of $5.03 to $5.10 a share. Analysts polled by Thomson Reuters anticipate net income of $5.09 a share on revenue of $1.663 billion.
Before the bell, shares had gained 3.1% to $91.25.
TheStreet Ratings team rates F5 NETWORKS INC as a Hold with a ratings score of C+. The team has this to say about their recommendation:
"We rate F5 NETWORKS INC (FFIV) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- F5 NETWORKS INC has improved earnings per share by 14.1% 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. This trend suggests that the performance of the business is improving. 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 ($5.10 versus $3.51).
- FFIV's revenue growth trails the industry average of 22.2%. Since the same quarter one year prior, revenues slightly increased by 9.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the Communications Equipment industry average, but is less than that of the S&P 500. The net income increased by 12.6% when compared to the same quarter one year prior, going from $67.72 million to $76.23 million.
- Net operating cash flow has declined marginally to $148.00 million or 0.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- FFIV has underperformed the S&P 500 Index, declining 7.95% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: FFIV Ratings Report