ATEN - A10 Networks: Lack Of Execution Has Negatively Impacted Valuation; Reduction In Expenses Or Sale Needed
Introduction
Following years of meaningful valuation underperformance, we believe the time is now for A10 Networks (ATEN) management to affect change or be replaced.
Since the company’s IPO in March 2014 thru 2018 (five-year period), A10 Networks has generated negative adjusted EBIT margins three years, essentially flat one year, and a high point of +3.5% in 2017. Over the same timeframe, comparable companies have generated adjusted EBIT margins over +30%, excluding 2014, which still equaled a combined average adjusted EBIT margin of +28.2%.
The significant levels of spending over the last five years