Today's Pre-Market Laggard Is F5 Networks (FFIV)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified F5 Networks ( FFIV) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified F5 Networks as such a stock due to the following factors:

  • FFIV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $356.3 million.
  • FFIV traded 25,285 shares today in the pre-market hours as of 9:29 AM.
  • FFIV is down 2.4% today from yesterday's close.

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More details on FFIV:

F5 Networks, Inc. develops, markets, and sells application delivery networking products that optimize the security, performance, and availability of network applications, servers, and storage systems. FFIV has a PE ratio of 30.0. Currently there are 16 analysts that rate F5 Networks a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for F5 Networks has been 1.9 million shares per day over the past 30 days. F5 has a market cap of $8.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 2.49 and a short float of 8.8% with 1.95 days to cover. Shares are up 18.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates F5 Networks as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • FFIV's revenue growth has slightly outpaced the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 1.30, which illustrates the ability to avoid short-term cash problems.
  • F5 NETWORKS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($5.22 versus $3.51).
  • Net operating cash flow has slightly increased to $158.93 million or 9.75% when compared to the same quarter last year. Despite an increase in cash flow, F5 NETWORKS INC's cash flow growth rate is still lower than the industry average growth rate of 30.05%.
  • The gross profit margin for F5 NETWORKS INC is currently very high, coming in at 84.79%. Regardless of FFIV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.74% trails the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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