I have run hot and cold on F5 (NASDAQ:FFIV) over the years, but that's largely because the Street plays a cat-and-mouse game with the shares based on the near-term prospects for product revenue growth. I liked the shares back in late January when skepticism was running high, and the nearly one-third move in the stock since then has been gratifying to watch.
That said, F5's problems with product growth remain and I don't share the confidence of the bullish sell-side analysts that a new product cycle is going to lead to a sustainable growth recovery, or that a move towards security is the panacea for what ails F5. I do believe this is a well-run business with a sticky, high-margin software/service component, not to mention a lot of options for M&A. Below $100, I'd seriously consider these shares again, but above $120, I'm not a big fan.
F5 Networks - Where Do We Grow From Here?