Drexel Hamilton Believes FFIV Won’t Stop Here

By Carrie Williams

Drexel Hamilton analyst Brian White reiterated a Buy rating on F5 Networks (NASDAQ: FFIV) today and set a price target of $160. The company’s shares opened today at $143.43, close to its 52-week high of $144.28.

White observed:

“We believe F5 represents an undervalued software play with a focus on the rising prominence of applications. With the ramp of a new product cycle and product revenue growth on the cusp of turning positive, we believe FFIV is an attractive GARP play at just 14x our CY:17 EPS estimate (ex-cash). Yesterday’s meeting further strengthened our stance that F5 is really a software company but with a hardware valuation. For example, F5 enjoys software economics with the second-highest operating margin (39% in 4Q:FY16) in our coverage universe. The company’s operating margin is only slightly below Oracle (39.5% in 1Q:FY17), a global software behemoth with FY:16 sales of over $37 billion.”

According to TipRanks.com, White is a top 100 analyst with an average return of 9.4% and a 60.9% success rate. White covers the Technology sector, focusing on stocks such as Juniper Networks, Amphenol Corp., and Cisco Systems.

Currently, the analyst consensus on F5 Networks is Moderate Buy and the average price target is $135.33, representing a -5.6% downside.

In a report released yesterday, Oppenheimer also assigned a Buy rating to the stock with a $157 price target.

The company has a one year high of $144.28 and a one year low of $86.03. Currently, F5 Networks has an average volume of 765.9K.

Based on the recent corporate insider activity of 48 insiders, corporate insider sentiment is negative on the stock. Earlier this month, Alan Higginson, a Director at FFIV sold 3,000 shares for a total of $412,470.

F5 Networks, Inc. engages in development of software-defined application services. The firm includes marketing and sale of application delivery networking products. The company was founded on February 15, 1996 and is headquartered in Seattle, WA.