This story originally appeared on Zack
F5 networks FFIV is expected to release its results for the fourth quarter of fiscal 2021 on October 26.
For the fiscal fourth quarter, F5 Networks estimates revenues of $ 660-680 million (midpoint of $ 670 million). Zacks’ consensus estimate for revenue is set at $ 673.6 million, which suggests 9.6% year-over-year growth.
The company expects non-GAAP earnings of $ 2.68 to $ 2.80 per share (average of $ 2.74). Zacks’ consensus estimate is set at $ 2.77 per share, indicating an increase of about 14% year over year.
Company profits have beaten estimates over the past four quarters, with an average pace of 5.5%.
Let’s see how things have turned out before the upcoming announcement.
Factors in play
F5 Networks’ continued focus on the company’s transition to a software-driven model is expected to have contributed to the overall performance of the company in the fiscal fourth quarter. Rising demand for multi-cloud application services is expected to have been a key growth driver during the quarter.
The company’s fiscal performance in the fourth quarter likely benefited from the pandemic-induced wave of work and home learning, which is driving demand for secure communication networks.
Additionally, F5 Networks and NGINX’s first combined solution, Controller 3.0, are expected to have increased the total addressable market and transaction size by spending more use cases in DevOps and Super-NetOps customer profiles. It is estimated that this had a positive impact on the overall performance of the company in the fourth fiscal quarter.
The boom in Enterprise Licensing Agreement (ELA) and annual customer subscriptions is likely to have spurred software growth. This, in turn, should have fueled product revenue growth. Zacks’ consensus estimate for product revenue is set at $ 325 million, calling for an improvement of about 16% from the $ 280 million figure announced a year ago.
Additionally, the coronavirus crisis is expected to have had minimal impact on F5 Networks business in the fiscal fourth quarter thanks to its effective inventory management.
However, as more organizations continue to switch to cloud computing due to its maintenance-free and cost-effective nature, F5 Networks hardware business may also have seen a downward trend in the quarter under review.
What our model says
Our proven model does not predict a profit beat for F5 Networks this season. The combination of a positive ESP on earnings, and Zacks rank 1 (strong buy), 2 (buy) or 3 (hold), increases the chances of beating the winnings. But it is not the case here. You can discover the best stocks to buy or sell, before they are flagged, with our ESP Income Filter.
F5 Networks currently has a Zacks Rank of 3 and a Revenue ESP of -0.64%.
Actions with favorable combinations
Here are a few companies that according to our model have the right combination of elements to show a profit rate in their next releases:
Materials applied AMAT has an Income ESP of + 0.52% and currently carries a Zacks Rank of 2. You can see The full list of today’s Zacks # 1 Rank stocks here.
Applied micro-devices AMD has an earnings ESP of + 2.31% and currently carries a Zacks Rank 2.
CACI International CACI has an earnings ESP of + 4.43% and currently holds a Zacks rank of 2.
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