F5 Networks Inc. (FFIV - Free Report) was among one of the biggest single-day gainers during yesterday’s trading session. Shares of the company gained nearly 13% yesterday after Reuters reported that it has hired investment bank, Goldman Sachs Group Inc. (GS - Free Report) , to help it in evaluating takeover offers.
This was also its biggest single day gain in almost five years. At yesterday’s closing price of $123.94, the company had a market capitalization of $8.3 billion.
Citing people familiar with the matter, the international news agency revealed that F5 Networks has received an acquisition offer and has thus approached Goldman Sachs to decide how to proceed.
F5 Networks is a leading provider of integrated Internet traffic and content management solutions designed to improve the availability and performance of mission-critical Internet-based servers and applications. In other words, it offers products that help organizations in boosting security and performance of applications and servers.
We believe that the company’s recent move to consider the buyout offer may be aimed to create value for shareholders as slower sales growth and declining profits have led to a significant decline in share prices from the last 52-week high.
Notably, F5 Networks reported lower-than-expected results for the second quarter of fiscal 2016 on Apr 20. A volatile spending atmosphere and intensifying competition negatively impacted the company’s overall performance.
Furthermore, during the second-quarter conference call, the company’s management revealed that due to soft market environment in the financial and telecommunications carrier, it is witnessing a decline in bookings. Notably, a major part of the company’s overall revenues come from these markets.
Therefore, by selling itself, F5 Networks will not only create value for investors but also bring in some new talent in the management level, which would reposition the company for growth.
For buyers too, this is the right time to make an offer as the stock is trading at a discount of 8% from its 52-week high of $135.20, which was achieved on Jul 31, 2015.
Nevertheless, sources remain doubtful if the recent offer will finally materialize, as F5 Networks has received takeover offers in the past too but had concluded none. As Reuters reported, the company “had previously attracted interest from companies that included IBM Corp (IBM - Free Report) , Oracle Corp. and Juniper Networks (JNPR - Free Report) ”.
We will have to wait to see what happens this time.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
F5 Networks Inc. (FFIV - Free Report) was among one of the biggest single-day gainers during yesterday’s trading session. Shares of the company gained nearly 13% yesterday after Reuters reported that it has hired investment bank, Goldman Sachs Group Inc. (GS - Free Report) , to help it in evaluating takeover offers.
This was also its biggest single day gain in almost five years. At yesterday’s closing price of $123.94, the company had a market capitalization of $8.3 billion.
Citing people familiar with the matter, the international news agency revealed that F5 Networks has received an acquisition offer and has thus approached Goldman Sachs to decide how to proceed.
F5 Networks is a leading provider of integrated Internet traffic and content management solutions designed to improve the availability and performance of mission-critical Internet-based servers and applications. In other words, it offers products that help organizations in boosting security and performance of applications and servers.
We believe that the company’s recent move to consider the buyout offer may be aimed to create value for shareholders as slower sales growth and declining profits have led to a significant decline in share prices from the last 52-week high.
Notably, F5 Networks reported lower-than-expected results for the second quarter of fiscal 2016 on Apr 20. A volatile spending atmosphere and intensifying competition negatively impacted the company’s overall performance.
Furthermore, during the second-quarter conference call, the company’s management revealed that due to soft market environment in the financial and telecommunications carrier, it is witnessing a decline in bookings. Notably, a major part of the company’s overall revenues come from these markets.
Therefore, by selling itself, F5 Networks will not only create value for investors but also bring in some new talent in the management level, which would reposition the company for growth.
For buyers too, this is the right time to make an offer as the stock is trading at a discount of 8% from its 52-week high of $135.20, which was achieved on Jul 31, 2015.
Nevertheless, sources remain doubtful if the recent offer will finally materialize, as F5 Networks has received takeover offers in the past too but had concluded none. As Reuters reported, the company “had previously attracted interest from companies that included IBM Corp (IBM - Free Report) , Oracle Corp. and Juniper Networks (JNPR - Free Report) ”.
We will have to wait to see what happens this time.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on GS - FREE
Get the latest research report on IBM - FREE
Get the latest research report on JNPR - FREE
Get the latest research report on FFIV - FREE