© Reuters. F5 (FFIV) Shares Slip 7% on Weak Forecast, Needham Says ‘Mix Was Not Good’
By Senad Karaahmetovic
F5 Networks (NASDAQ:) shares are down over 7% in pre-market trading despite the company reporting better-than-expected FQ4 results.
FFIV’s EPS came in at $2.62 to beat FactSet’s consensus of $2.52. came in at $700 million, again higher than the consensus estimate of $692.07 million.
For this quarter, FFIV expects EPS to come at $2.31 (the midpoint), a big miss compared to the consensus of $2.58. Revenue is seen flat at $700 million (the midpoint), better than the consensus of $694.62 million.
On a full-year basis, revenue is seen rising between 9% and 11% compared to the year-ago period.
“Over the next year, our business is likely to benefit from tailwinds to our systems business as a result of improving component availability and to bear some weight from macroeconomic headwinds,” said François Locoh-Donou, F5’s President and CEO.
Needham & Company analysts lowered the price target to $200 per share from $303 despite raised estimates.
“While we are edging up our Revenue and EPS estimates, we are lowering our Target on the fragility evidenced in F5’s new Software business. We find FFIV inexpensive at 12x EV/E on our CY23 est.,” they wrote.
Raymond James analysts maintained a Market Perform rating on FFIV stock.
“The expected FY23 mix is likely a point of concern for investors, with the outlook for full-year software growth coming in well below expectations, and higher than expected hardware sales making up the difference. Share were indicated down ~4% after market. Although the implied supply constraint relief is welcome, management’s comments regarding expected macro headwinds impacting software demand may compound longer term, secular challenges,” they said.
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