Thursday, November 18, 2010

F5 Networks (NASDAQ:FFIV) Has One of Best Business Models in Tech Industry Says Gleacher

Gleacher said they believe F5 Networks (NASDAQ:FFIV) has one of the best financial models in the tech industry, but recommend investors stay on the sidelines for now, based on concerns over risk versus reward.

"We believe F5 has one of the best financial models in the tech industry driven by its value-added products, but shares are fully valued at current levels. In our view, the strategic position of F5 in the data center is undeniable. Other than VMWare (NYSE:VMW), we have difficulty trying to identify another enterprise infrastructure provider with as many secular tailwinds as FFIV currently enjoys (e.g., mobile Internet traffic growth, data center consolidation, virtualization, HTML5 browser as the app, etc). As voice, video and data traffic proliferates, F5 is increasingly viewed as the "strategic point of control" in the unified IP network with its layer 4-7 expertise. However, despite all these fundamental positives, we still recommend investors remain on the sidelines due to unfavorable risk/reward profile," Gleacher said.

Gleacher maintains a "Neutral" rating on F5, which closed Wednesday at $115.01, losing $0.94, or 0.81 percent.

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