Cisco Systems, Inc. (CSCO), Fortinet Inc (FTNT): Can F5 Networks, Inc. (FFIV) Deliver on High Expectations?

Can new acquisitions and products ignite growth?
While F5 Networks, Inc. (NASDAQ:FFIV)’s growth has indeed slowed, management has not given up. Over the past couple of weeks, the company has made several new announcements, including a key acquisition in LineRate Systems, a company that develops software-defined networking, or SDN, services.

This is a deal that I felt F5 had to make, which should help strengthen the company’s current lead in the application deliver control, or ADC, market. And the fact Cisco has recently exited the ADC market leaves the door open for F5, which already enjoys a 50% share, to dominate the likes of Juniper Networks, Inc. (NYSE:JNPR), which has shown its own signs of struggling.

What’s more, F5 recently announced the F5 Networks, Inc. (NASDAQ:FFIV) Mobile App Manager, a new hybrid cloud solution for mobile application management, which now puts the company in a position to steal market share from Citrix Systems, Inc. (NASDAQ:CTXS) and Aruba Networks, Inc. (NASDAQ:ARUN). In other words, despite my bearish views, it seems the company is finally getting back to what it does best.

That said, it remains to be seen as to what extent these recent moves can ignite growth. Product revenue can’t stay in the single digits, not to the extent that it justifies Modoff’s optimism. As noted, these shares are already trading at five times trailing sales. Plus, with Cisco and Fortinet performing so well, F5’s performance has to really stand out. Unfortunately, this is a situation where Modoff just might have set the bar too high.

The article Can F5 Deliver on High Expectations? originally appeared on Fool.com and is written by Richard Saintvilus.

Fool contributor Richard Saintvilus has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems, F5 Networks, and Sourcefire. The Motley Fool owns shares of F5 Networks.

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