JNPR - F5 Inc.: A Necessary Reassessment As Earnings Near

2024-07-24 13:38:50 ET

Summary

• Shares of F5, Inc. have fallen short of the broader market in recent months, as revenue continues its decline.
• The good news is that profits are rising, and this trend is likely to continue moving forward.
• Until new earnings results come out, I am taking a neutral stance on the firm, but that picture could ultimately change.

One company that has really underperformed my own expectations as of late is F5, Inc. ( FFIV ). You see, back in April of this year, I wrote an article that discussed earnings expectations for the second quarter of the company's 2024 fiscal year. I acknowledged in that article that analysts were predicting a decline in revenue but an increase in profitability. But even with that improvement on the bottom line, I felt as though shares were not yet cheap enough to warrant any meaningful upside relative to the broader market. So instead of rating the company a ‘buy’, I ended up rating it a ‘hold’....

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