F5 Could More Than Double As Solid Demand Trends Continue & Supply Constrains Start To Ease, Needham Says

  • Needham analyst Alex Henderson reiterated a Buy and $303 price target on F5, Inc FFIV.
  • F5 was careful not to update conditions post its last earnings call, but he sensed that demand was vital for Security and Systems. 
  • Supply remains a significant constraint and has not improved materially, but it seems there was improvement at the margin. 
  • F5 highlights solid redesign progress, which should start to help in the FY1Q/CY4Q quarter and ramp across FY23.
  • Also ReadAI 'Transformed' This Networking Firm. Cisco May Want To Take Note, Analyst Says 
  • In addition, the software/feature work on the new rSeries systems continues to make solid progress and is gradually opening customer sales opportunities. 
  • On Security and Software, F5 is pretty straightforward. 
  • Demand remains strong, the pipeline is robust, and the macro conditions are not impacting the trajectory. 
  • FFIV shares have corrected more than other networking names, and surprisingly, based on his estimates, FFIV trades at a discount to Extreme Networks, Inc EXTR and Juniper Networks, Inc JNPR on CY23 EV/E and Cisco Systems, Inc CSCO on CY24.
  • Price Action: FFIV shares traded lower by 2.20% at $142.46 on the last check Friday.
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