In a lot of ways, application and network traffic manager F5 (FFIV)
is a quintessential tech stock. This company built a great little
island for itself in Application Delivery Controllers (or ADCs), but has
had some meaningful ups and downs in building/linking new,
equally-valuable islands. F5 has also seen wild swings in its share
price as investors wax and wane on its growth prospects; when investors
like F5, they really like it, and when they don't like it, they really don't like it.
The
stretch from early 2012 to about mid-2013 was a rough one, as the share
price plunged about 50% on fears that the ADC market was slowing (and
perhaps permanently so), virtual ADCs and competition from Citrix (CTXS)
were chewing up F5's business, and that new growth platforms like
security and diameter signaling couldn't fill the breach. Then,
investors got more bullish on F5's ADC prospects, as well as its overall
vision to become a comprehensive player in network orchestration,
application control, and load balancing, and the stock has regained a
lot of that lost value.
What now? I think F5 is fundamentally
undervalued, but this is also a stock where momentum/sentiment plays a
powerful role. I don't think the shares have topped out just yet, but
anybody buying today has to be pretty nimble and/or have a good sense of
where the Street's mood is on the shares from month-to-month or
week-to-week.
Keep reading here:
F5 Networks Basking In Some Rebound Love
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