Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

F5 Networks stock gains 9% on lifted full-year outlook; Analysts remain cautious

Published 01/29/2024, 04:28 PM
Updated 01/30/2024, 06:59 AM
© Reuters.  F5 Networks (FFIV) stock gains after raising full-year outlook
(Updated - January 30, 2024 6:57 AM EST)

F5 Inc. (FFIV) reported its first-quarter results, surpassing the average analyst estimates.

The company achieved net revenue of $692.6 million, a decrease of 1.1% year-over-year, but higher than the expected $684.8 million. The adjusted earnings per share stood at $3.43, significantly higher than last year's $2.47 and exceeding the forecast of $3.04.

In light of these results, F5 revised its fiscal year 2024 adjusted earnings per share outlook, predicting a growth of 6% to 8%, up from the previously estimated 5% to 7%. This revision is due to a lower expected tax rate for the fiscal year.

The company’s stock rose 9% in pre-market Tuesday trade.

For the second quarter of fiscal year 2024, F5 forecasts revenue in the range of $675 million to $695 million, with non-GAAP earnings projected between $2.79 and $2.91 per diluted share.

Analysts were looking for Q2 revenue of $674.3 million and adjusted EPS of $2.97.

“Our team delivered solid first quarter results, including revenue near the high end and earnings per share above the high end of our guidance ranges,” said François Locoh-Donou, F5’s President and CEO.

Morgan Stanley analysts raised the price target by $15 to $190 per share.

"Upside to FQ1 driven by pricing benefits rolling through services as well as some unexpected perpetual license election by service providers. Remain EW, as some signs of stability in enterprise spend more encouraging, but timing around reacceleration still uncertain," analysts said.

On the other hand, Evercore ISI analysts ask - is this growth durable?

"While we think investors will struggle with the trajectory of s/w segment performance (perpetual vs. subscription) and their ability to sustain >30% EBIT margins."

"The company appears on-track to do >$12.50 EPS in FY24 and likely close to $13.50-14 in FY25 – should they be able to execute to this organically and capital returns remain shareholder friendly we think the stock can keep working higher," analysts said in a note.

Latest comments

I'm so excited to meet this company and make great friends.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.