Analyst Note
| Mark Cash |Narrow-moat F5 Networks announced its intention to acquire Volterra for a total consideration of about $500 million. F5 also provided preliminary first fiscal quarter results for revenue growth and adjusted earnings that both eclipsed its earlier guidance, and F5 increased its revenue growth targets for fiscal years 2021 and 2022 and the longer term. We believe the Volterra acquisition is aligned with F5’s strategy of ensuring application delivery and security, can accelerate its software and as-a-service growth plans, and help differentiate itself from public cloud application delivery controller offerings. Based on expecting higher revenue growth from this acquisition and still being able to gain operating leverage in the coming years, we are raising our fair value estimate to $185 from $175 and view shares as fairly valued.