Shares of F5 Networks (FFIV) spiked about 13% in Monday’s after-hours trading after the company reported solid beat-and-raise results for the third quarter of Fiscal 2024. The Software-as-a-Service (SaaS) provider’s adjusted earnings per share (EPS) rose 4.7% year-over-year to $3.36, beating the consensus of $2.97. Meanwhile, revenue fell 1% year-over-year to $695.5 million but surpassed the Street’s estimate of $686.06 million.
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F5 Networks was able to meet the top end of the guidance range for both revenue and earnings. This was aided by solid demand for its software solutions and global services as well as disciplined cost management. However, Systems revenue was a laggard, falling 16% compared to the prior-year period.
F5 Networks offers hybrid and multi-cloud application security and delivery solutions for apps that are on-premise, in the cloud, and at edge locations. In the past year, FFIV shares have gained 12.2%.
F5 Lifts Outlook, Beats Consensus
F5 Networks is highly optimistic about the growing demand for its software services and offerings to large organizations. The company lifted its full-year earnings guidance and now projects adjusted EPS growth of 12%, up from the previous range of 7% to 9%. Moreover, it expects to reach the higher end of its prior full-year revenue outlook, at $2.8 billion.
At the same time, for Q4, F5 now expects revenue to be between $720 million and $740 million, higher than the consensus of $717.4 million. Similarly, Q4 adjusted EPS is projected in the range of $3.38 to $3.50, also exceeding estimates of $3.33.
Hedge Funds Are Positive on F5 Stock
F5 Networks has a Positive Hedge Fund Confidence Signal based on TipRanks’ Hedge Funds Trading Activity tool. This is due to the fact that several hedge funds increased their holdings of FFIV stock by 166,100 shares in the last quarter.
Is F5 a Good Stock to Buy?
FFIV stock currently has a Hold consensus rating based on one Buy, four Holds, and one Sell recommendation. These ratings are subject to change as analysts might reconsider their recommendations in reaction to the Q3 print. Also, the average F5 Networks price target of $187.67 implies 5.7% upside potential from current levels.
