Tags: F5 | Networks | cloud | FFIV

F5 Networks Stands at Center of Cloud Computing Move

By    |   Friday, 31 August 2012 08:49 AM

F5 Networks (FFIV) stands at the center of the move by corporate America toward cloud computing, the trend away from investing in owned and managed data capability and instead leasing computer power and storage over the web.

F5 Networks provides Application Delivery Networking (ADN) technology that optimizes the delivery of network-based applications and the security, performance and availability of servers, data storage devices and other network resources.

The company’s products collectively function as a dynamic control plane that simplifies the management of data center operations and the delivery of services across diverse data center resources, management said in a recent filing.

“F5 Networks pioneered load-balancing technology that distributes internet traffic evenly across multiple servers, making them appear like a single device,” the company said in a filing.

“Today, our BIG-IP application delivery controllers (ADCs) are generally positioned in front of web and application servers, balancing traffic and performing compute-intensive functions such as encrypting and un-encrypting transmissions, screening traffic for security threats, maintaining open connections with servers, speeding the flow of traffic, managing access to applications and data and a variety of other functions that improve the security, performance, and availability of applications.”

F5 Networks has a market cap of $7.70 billion in a sector, communications equipment, where the average company size is $5.06 billion. Its trailing 12-month P/E ratio is 28.31 and its five-year projected price-to-earnings-growth (PEG) ratio is 1.59.

Its projected earnings per share growth for the coming year is 16.89 percent, compared to a sector average of 17.73 percent.

Strong growth

Analysts are positive on FFIV, with buy or outperform calls from Caris & Company, Deutsche Bank, Lehman Brothers, Merrill Lynch, Morgan Stanley, Needham, Oppenheimer & Company, Piper Jaffray, RBC Capital Markets, Smith Barney, and Standard & Poor’s Equity Research.

“We believe positive industry trends toward server virtualization and data consolidation will provide FFIV with strong underlying growth drivers. We do not believe FFIV's strong growth profile is reflected in the valuation,” S&P analysts wrote on July 19.

F5 Networks next reports on Oct. 24.

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Friday, 31 August 2012 08:49 AM
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