Analyst Note
| Mark Cash |Narrow-moat F5 Networks’ first-quarter 10% year-over-year revenue growth was in line with FactSet consensus estimates while adjusted earnings of $2.59 came in higher than expected. In our view, F5 already positively surprised investors after providing preliminary first-quarter results on Jan. 7 upon announcing its $500 million Volterra acquisition to expand its security-as-as-service and edge platform capabilities. Drivers of the strong results included momentum with software offerings, increased application security demand, and F5’s systems business staying resilient. In our view, F5 is well positioned to capitalize on the heightened importance of delivering secure applications. We believe its product portfolio is gaining increased traction with enterprises transforming their networking architectures. We are maintaining our $185 fair value estimate and view shares as fairly valued.