F5 Networks’ (FFIV) revenue rose at a four-year CAGR (compound annual growth rate) of 9% to $2.1 billion in fiscal 2017, which ended on September 30, 2017. Its net income improved at a four-year CAGR of 11% to $542.9 million. Its revenue rose 3% to $1.6 billion in the first nine months of fiscal 2018, which ended on June 30. Products and services constituted 44% and 56% of the company’s revenue, respectively.
The company continued to observe momentum in its security and software business, in its public cloud offerings, and in customer enthusiasm surrounding its new multicloud application solutions. It expects its newly announced dedicated security products to provide security professionals with innovative ways to combat cyberattacks.
How do the projections look?
The company’s revenue forecasts for fiscal 2018, fiscal 2019, and fiscal 2020 are $2.2 billion, $2.2 billion, and $2.3 billion, respectively. Its projected net incomes for the years are $595.8 million, $626.9 million, and $663.7 million, respectively. The stock has “strong buy,” “buy,” and “hold” recommendations from two, four, and 12 analysts, respectively. It has “sell” recommendations from three analysts. Its PE forecasts for fiscal 2018, fiscal 2019, and fiscal 2020 are 17.6x, 16.2x, and 14.9x, respectively.
The stock against the indexes
At the end of last week, FFIV had been bested by the NASDAQ Composite Index and the S&P 500 Application Software Index in the last five days, in the last month, and in the last three months. The stock had beaten the above indexes YTD and in the last year. The stock closed at an 18% discount to its 52-week high and a 43% premium to its 52-week low at the end of the week.
In July, F5 Networks introduced new offerings to counter cyberattacks. The company also initiated the virtualization of simplified network functions for service providers in August. Network function virtualization refers to a network architecture concept that employs IT virtualization technologies for the creation of communication services.