Analysts: Demand Intact For F5 Networks Inc. Products

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F5 Networks Inc.
FFIV
first earnings miss in seven quarters may not signal a change in its long-term growth trend according to several analysts Thursday. Shares of the Seattle-based networking company opened sharply lower and traded recently at $112.26, off nearly 11 percent. F5 said Wednesday that trouble closing a number of large commercial and federal deals resulted in the missed expectation. Nomura's Stuart Jeffrey said the resulting sell-off of shares is an "overreaction" and expects F5 will "trade back up as investors focus on the still-solid fundamentals." But Jeffrey maintained a Neutral rating and $118 target and said the company's earnings growth will slow to the "high single digits" from 27 percent in the recent quarter. Barclay's Ben A. Reitzes cut his price target on F5 by more than 16 percent and maintained a Equal Weight rating. "Fundamentals appear largely intact," but year-over-year earnings growth comparisons will "become much more difficult" in coming quarters, Reitzes said. The company's slightly lower-than-expected guidance "may say more about ensuring beatable expectations than a change in demand trends," Wunderlich's Matthew S. Robison said. Robison maintained a Hold rating and $135 target. JPM's Erik Suppiger left his similar rating and target unchanged and called F5's sell-off "a buying opportunity." Suppiger said demand "remains intact" while the company rolls out a raft of new products for data centers, which are among the "fastest growing markets in networking." While maintaining a Buy rating, D.A. Davidson's Mark Kelleher trimmed his price target more than 7 percent to $153. F5's cash flow and margins afford it "significant financial flexibility to attack new markets," Kelleher said. -13.69 (-10.87%
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