Shares of application security and delivery tools provider F5 Networks (FFIV) rallied 6.1% in the extended trading session on Monday as the company’s fiscal third-quarter earnings and revenues surpassed analyst’s expectations.
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Adjusted earnings stood at $2.76 per share, beating the Street’s estimates of $2.46. Also, it compares favorably with $2.18 per share.
Total revenues climbed 12% year-over-year to $652 million and were able to beat the Street’s expectations of $638.1 million. During the quarter, product revenues increased 22.3%, while service revenues were up 3.5%. (See F5 stock chart on TipRanks)
The President and CEO of F5, François Locoh-Donou, said, “With our expanded application security and delivery portfolio, we are uniquely positioned to solve our customers’ most significant modern and traditional application challenges on premises, in the cloud, and across multiple clouds.”
Notably, the company expects revenues for the fourth quarter of Fiscal Year 2021 to be in the range of $660 million to 680 million. Also, adjusted earnings are anticipated to be between $2.68 and $2.80 per share.
On July 16, Needham analyst Alex Henderson assigned a Buy rating to the stock with a price target of $255 (32.4% upside potential).
Henderson noted, “As employees return to campus, high volumes of application traffic growth for video and collaboration are stressing the existing infrastructure and driving increased demand for ADCs. At the same time, strong growth in Kubernetes adoption is driving robust demand for containerized vADCs, where NGINX has a 65% plus Market Share.”
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus based on 4 Buys, 4 Holds and 1 Sell. The average F5 price target of $217.88 implies 13.1% upside potential from current levels.
TipRanks data shows that financial blogger opinions are 100% Bullish on FFIV, compared to the sector average of 69%.
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