Like VMware (VMW), F5 Networks (FFIV) is in cloud computing. Unlike VMW, FFIV doesn’t have good numbers going for it. Like VMW, FFIV looks to be a buy in the 70s. Unlike VMW, FFIV isn’t a good stock to buy if (once) it gets there.
One Year Chart
Wow, profit growth was only 6% last quarter. Not good. FFIV used to be a 35% grower. Not anymore. Even the Long Term Growth Rate fell this quarter, from 19% to 17%.
Notice this stock was selling between $70 and $80 a year ago. FFIV seems to be headed back to the 70s.
FFIV also just finished its 2012 fiscal year. Profit growth was only 14%. This stock is barely on my radar, but I made money on FFIV in the past and if the global economy heats up next year this stock could have accelerating profit growth.
Fair Value
FFIV is worth 15 times earnings to me. The stock’s now worth $75. 2013 estimates just dropped from $5.18 to $4.98. This stock has little momentum.
Sharek’s Take
F5 Networks isn’t a good stock right now. Its not even fairly priced — the stock’s 20% too high. There’s similaritied between VMW and FFIV — one being the stocks have support in the 70s — but VMware is a much better investment for those looking to get into cloud computing.
View the Earnings Table here.View the Ten Year Chart here.
