Story updated at 9:50 a.m. to reflect market activity.
Shares of F5 Networks gained 0.2% to $125.33 in morning trading.
The analyst firm also raised its EPS estimates for the business applications company through 2015. Pacific Crest now expects the company to report earnings of $5.36 a share for full year 2014, up from its previous estimate of $5.35 a share. The firm estimates F5 Networks will report earnings of $6.34 a share for 2015, up from its previous estimate of $6.30 a share.
"Reseller feedback suggests F5 is benefiting into the year end from a seasonally strong Federal and Enterprise rebound and an expanding partner ecosystem driven by Cisco and VMware," analyst Brent Bracelin wrote.
Separately, TheStreet Ratings team rates F5 NETWORKS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate F5 NETWORKS INC (FFIV) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, notable return on equity, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 18.9%. 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 1.40, 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.
- F5 NETWORKS INC has improved earnings per share by 22.1% 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. 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 ($5.35 versus $3.51).
- Net operating cash flow has slightly increased to $138.23 million or 9.50% when compared to the same quarter last year. In addition, F5 NETWORKS INC has also modestly surpassed the industry average cash flow growth rate of 4.83%.
- You can view the full analysis from the report here: FFIV Ratings Report
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