F5 (FFIV) Earnings Preview: What to Expect on October 28th
Get ready for F5, Inc. (FFIV) to unveil its quarterly earnings on Monday, October 28th. As a market leader in the application delivery controller space, F5 plays a crucial role in ensuring the security, performance, and automation of applications for businesses, service providers, and government entities. With analysts expecting an EPS of $3.45, investors will be keenly watching the company’s performance and guidance.
What to Watch For:
Beyond just beating the EPS estimate, F5 bulls will be hoping for positive guidance, which indicates the company’s expected growth for the next quarter. It’s important to remember that the market’s reaction to earnings isn’t solely determined by whether the company surpasses or misses estimates. Forward guidance, providing insights into the company’s future outlook, often plays a more significant role in influencing stock prices.
A Look Back at Past Earnings:
F5 has demonstrated a consistent track record of exceeding expectations in recent quarters. In the last quarter, the company surpassed EPS estimates by $0.40, leading to a 12.99% increase in the share price the next day. Here’s a breakdown of F5’s past performance and corresponding price changes:
| Quarter | EPS Estimate | EPS Actual | Price Change (%) |
|—|—|—|—|
| Q3 2024 | 2.96 | 3.36 | 13.0% |
| Q2 2024 | 2.86 | 2.91 | -9.0% |
| Q1 2024 | 3.04 | 3.43 | 1.0% |
| Q4 2023 | 3.21 | 3.50 | 2.0% |
Performance of F5 Shares:
As of October 24th, F5 shares were trading at $213.57. Over the past 52 weeks, shares have climbed by 44.71%, suggesting a positive sentiment among long-term shareholders as they anticipate this earnings release.
Analyst Sentiment:
Understanding market sentiment and expectations within the industry is crucial for investors. Based on 7 analyst ratings, F5 has a consensus rating of Neutral. The average one-year price target is $211.0, indicating a potential 1.2% downside.
Comparison to Peers:
To gain a better understanding of F5’s position within the industry, let’s compare its analyst ratings and price targets with those of its peers: Juniper Networks, Ubiquiti, and Ciena.
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Juniper Networks:
Neutral consensus rating with an average 1-year price target of $40.0, indicating a potential 81.27% downside.*
Ubiquiti:
Buy consensus rating with an average 1-year price target of $172.0, implying a potential 19.46% downside.*
Ciena:
Neutral status with an average 1-year price target of $63.79, indicating a potential 70.13% downside.Key Takeaways from Peer Analysis:
| Company | Consensus Rating | Revenue Growth | Gross Profit | Return on Equity |
|—|—|—|—|—|
| F5 | Neutral | -1.02% | $559.07M | 4.85% |
| Juniper Networks | Neutral | -16.82% | $688.50M | 0.76% |
| Ubiquiti | Buy | 3.33% | $204.14M | 171.67% |
| Ciena | Neutral | -11.76% | $403.94M | 0.49% |
While F5 ranks in the middle for revenue growth, it boasts top positions for gross profit and return on equity, showcasing strong financial performance and efficient use of shareholder funds.
About F5:
F5 is a recognized leader in the application delivery controller market, offering solutions for security, performance, and automation. Its customer base spans enterprises, service providers, and government entities. Revenue is evenly distributed between its services and product businesses, with a growing focus on software adoption. Founded in 1996 and headquartered in Seattle, F5 employs approximately 6,500 individuals and generates approximately 55% of its revenue from the Americas, 25% from EMEA, and 20% from APAC/Japan.
F5’s Financial Overview:
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Market Capitalization Analysis:
F5’s market capitalization currently falls below industry benchmarks, suggesting a smaller scale relative to its peers. This could be attributed to factors such as growth expectations or operational capacity.*
Revenue Trend:
Over the past three months (as of June 30th, 2024), F5 experienced a slight revenue decline of approximately -1.02%. This decrease reflects a dip in top-line earnings. However, compared to its peers within the Information Technology sector, the company exhibits a higher growth rate.*
Net Margin:
F5 boasts a net margin exceeding industry standards, highlighting its impressive financial performance and effective cost management, resulting in strong profitability (20.72%).*
Return on Equity (ROE):
F5’s ROE also surpasses industry standards, demonstrating efficient utilization of shareholder equity capital (4.85%).*
Return on Assets (ROA):
With an impressive 2.67% ROA, F5 excels beyond industry benchmarks, signifying efficient asset management and robust financial health.*