UPDATE: McAdams Wright Ragen Upgrades F5 Networks to Buy, Reiterates $110 PT on Attractive Valuation

In a report published Wednesday, McAdams Wright Ragen analyst Sid Parakh upgraded the rating on F5 Networks

from Hold to Buy, and reiterated the $110.00 price target. In the report, Parakh noted, “F5's stock has pulled back over 18% since February and is now trading at valuation levels we see as attractive. We keep our $110 price target (19.5x our FY14 EPS of $5.64, Street = $5.82) and suggest restricting purchases to <$89. At current levels, F5 trades at 15.5x our FY14 forecast (12.6x on an ex-cash basis). New product offerings in adjacent areas (security) and deeper focus on the telecom vertical will significantly increase F5's addressable market to ~$20 billion by 2016 (from ~$5 billion in 2012). Meanwhile, F5 continues to enjoy leadership position (48% market share) in its core application delivery controller (ADC) segment and Cisco's exit from this market opens up an added $200 million per year in revenue opportunity. F5 won three Cisco-replacement deals in Q1 from Fortune 50 customers―validating F5's technology leadership position.” F5 Networks closed on Tuesday at $87.57.