FFIV – Market expectations are for material Uniform ROA compression, and management is concerned about their services, NGINX, and growth opportunities

June 16, 2019

  • F5 Networks, Inc. (FFIV:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 12.7x Uniform P/E, implying bearish expectations for the firm. Moreover, management may be concerned about their service capabilities, NGINX integration, and 5G and API management growth opportunities
  • Specifically, they may be exaggerating their service capabilities, the security of their applications, and the potential opportunities stemming from the 5G ramp-up. In addition, they may be concerned about the progress of their NGINX integration, their ability to enter the API management space, and the demand for their Advanced Web Application Firewall. Also, they may be exaggerating the efficacy of their services for communications providers, the progress of their HQ relocation, and enterprise license agreements’ ability to drive growth in their multi-cloud application services.

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