What Happened?

Shares of network application delivery and security specialist F5 (NASDAQ:FFIV) jumped 12.5% in the morning session after the company reported third-quarter earnings that blew past analysts' billings and revenue expectations. This led to an EPS beat. Looking ahead, revenue guidance for the upcoming quarter was ahead while EPS guidance was in line. Zooming out, we think this was a solid quarter.

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What The Market Is Telling Us

F5’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. Moves this big are rare for F5 and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock gained 14.5% on the news that the company reported second-quarter earnings results. F5 provided revenue guidance for the next quarter, which topped analysts' expectations, which is what the market seems to be cheering. In addition, revenue beat analysts' estimates during the quarter, and gross margin improved compared to last year. 

Separately, the company announced that Frank Pelzer, executive VP and CFO, plans to retire during Q1 2025, which ends December 31, 2024. He is expected to assist in transitioning to his intended successor, Edward Cooper Werner, current senior VP of Finance. Overall, it was a strong quarter for the company.

F5 is up 35.1% since the beginning of the year, and at $238.13 per share, has set a new 52-week high. Investors who bought $1,000 worth of F5’s shares 5 years ago would now be looking at an investment worth $1,659.

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