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F5 Networks (FFIV) to Report Q3 Earnings: What's in Store?

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F5 Networks (FFIV - Free Report) is set to report third-quarter fiscal 2021 results on Jul 26.

For the fiscal third quarter, F5 Networks estimates revenues of $620-$650 million (mid-point $635 million). The Zacks Consensus Estimate for revenues is pegged at $637 million, suggesting year-over-year growth of 9.2%.

The company anticipates non-GAAP earnings of $2.36-$2.54 per share (mid-point $2.45). The Zacks Consensus Estimate is pinned at $2.47 per share, indicating a year-over-year increase of 13.3%.

F5 Networks, Inc. Price and EPS Surprise

F5 Networks, Inc. Price and EPS Surprise

F5 Networks, Inc. price-eps-surprise | F5 Networks, Inc. Quote

The company’s earnings surpassed estimates in all of the trailing four quarters, the average beat being 4.2%.

Let’s see how things have shaped up prior to the upcoming announcement.

Factors at Play

F5 Networks’ fiscal third-quarter performance is likely to have benefited from the COVID-19 pandemic-induced work-from-home and online-learning wave, which is boosting demand for secured communication networks.

The company’s sustained focus on transitioning the business to a software-driven model is anticipated to have aided the second quarter’s overall performance. Surging demand for multi-cloud application services is expected to have been a key growth driver during the quarter.

Rising traction of the Enterprise License Agreement (ELA) and annual subscriptions by customers is likely to have boosted software growth. This, in turn, is anticipated to have fueled product top-line growth. The Zacks Consensus Estimate for product revenues is pinned at $302 million, calling for approximately 18% improvement from the year-ago reported figure of $256 million.

Additionally, F5 Networks and NGINX’s first combined solution — Controller 3.0 — is expected to have boosted the total addressable market and deal sizes by spending more use cases across DevOps and Super-NetOps customer profiles. This is likely to have positively impacted third-quarter overall performance.

Furthermore, the coronavirus crisis is anticipated to have had a minimal impact on F5 Networks’ business during the fiscal second quarter thanks to its efficient inventory management.

However, as more and more organizations continue shifting to cloud computing dueto the maintenance-free and cost-effective nature, F5 Networks’ hardware business might have seen a declining trend during the quarter under review as well.

What Our Model Says

Our proven model does not predict an earnings beat for F5 Networks this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

F5 Networks currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Avnet, Inc. (AVT - Free Report) has an Earnings ESP of +0.66% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Apple Inc. (AAPL - Free Report) has an Earnings ESP of +3.40% and carries a Zacks Rank #2, at present.

Facebook (FB - Free Report) has an Earnings ESP of +7.52% and holds a Zacks Rank of 3, currently.


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