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Investing.com – F5 Networks stock (NASDAQ:FFIV) was up 1% in Tuesday’s premarket trading after Needham upgraded the target to $303 while maintaining a ‘buy’ rating.
Analyst Alex Henderson believes the company is pivoting to the cloud and the multiple should thus advance, according to StreetInsider.
Henderson’s target is around 25% higher than the stock’s Monday closing of $243.32. Analyst Alex Henderson earlier had a target of $266 for the stock.
According to the analyst, recent hacker-related attacks should strengthen demand for F5’s security products. The year should see software exceed 50% of product revenue and that should help the annual operating margins improve by at least 200 basis points, Henderson wrote.
For the ongoing financial year ending September 30, 2022, F5 expects to deliver revenue growth of 8%-9%. This forecast, given in October, was 2%-3% ahead of the Street’s, according to Needham. Software revenue growth for the year is seen at 35%-40%.
In the current quarter that ends Friday, F5 expects to deliver revenue of $675 million at center of its guidance range, with adjusted earnings around $2.77 per share at midpoint of the range.
