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F5 Edges Higher on Needham Upgrade Citing Cloud Play -Breaking

by Mike Robinson

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© Reuters.

By Dhirendra Tripathi

Investing.com – F5 Networks stock (NASDAQ:) was up 1% in Tuesday’s premarket trading after Needham upgraded the target to $303 while maintaining a ‘buy’ rating.

StreetInsider reports that analyst Alex Henderson thinks the company is moving to the cloud, and should therefore move forward. 

Henderson’s target is around 25% higher than the stock’s Monday closing of $243.32. Alex Henderson had earlier set $266 as the target for this stock.

The analyst believes recent hacker attacks will increase demand for F5 security products. Henderson said that the software should account for at least 50% of annual product revenue in 2019. This should lead to an increase in operating margins by 200 basis points.

F5 predicts that revenue will grow by 8% to 9% in the next financial year, which ends September 30, 2022. This forecast, given in October, was 2%-3% ahead of the Street’s, according to Needham. For the year, software revenue growth was expected to rise between 35% and 40%.

F5 anticipates that F5 will deliver revenue in the current quarter, which ends Friday. Adjusted earnings of around $2.77 per share are at the midpoint of F5’s guidance range.

 

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