Friday, March 18, 2011

Fall from Grace for F5 Networks (FFIV)

One of our big winners the past few years has fallen on seriously hard times - F5 Networks (FFIV).  After disappointing guidance mid January [Jan 19, 2011: F5 Networks Implodes After Hours on Disappointing Guidance] the stock was hammered, and filled a gap from October 2010.  After a cursory bounce back that tacked on some $25 and took it back to $130 it's been through another round of downside since mid February, tracking the general indexes.

However, today we are seeing another breakdown as it has fallen below the lows of mid January.   Next stop would appear to be $90, where the stock bottomed in mid October.   Technically, this looks to remain a 'short on any bounce' candidate until it can work out of this tailspin.  On the plus side, this is another name that is getting more interesting from a long term perspective as the valuation was nosebleed.  Still not "cheap" but it's fallen from a peak of 40x forward (2011) earnings, to 27x in the past two months.  Expectations should be quite low going into the next earnings report in April.

[Jan 21, 2011: [Video] Interview with FFIV CEO John McAdams]
[Sep 7, 2010: [Video] F5 Networks on the Rise]
[Aug 27, 2010: IBD - F5 Networks Leads in Key Cloud Market]
[Jan 22, 2010: CEO Interview with F5 Networks]
[Apr 8, 2009: Stimulus Fire Hydrant (Worldwide) Should Benefit Networking Companies/Broadband]

No position

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