What's in Store for F5 Networks (FFIV) in Q1 Earnings?

F5 Networks Inc. FFIV is set to report first-quarter fiscal 2017 results on Jan 25. Last quarter, the company posted a positive earnings surprise of 9.74%. Notably, in the trailing four quarters, F5 Networks surpassed the Zacks Consensus Estimate thrice while missing it once, resulting in an average positive surprise of 3.37%.

Let's see how things are shaping up for this announcement.

Factors to Consider

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. Better execution and focus on enterprise and service providers have placed F5 Networks well in the application delivery controller market.

The company’s last reported results were encouraging, with both the top and the bottom line coming ahead of the respective Zacks Consensus Estimate. Also, year-over-year comparisons on both counts were favorable.

It is worth mentioning that the company’s “Good, Better, Best” (GBB) pricing strategy and its BIG-IQ platform remain tailwinds. Revenue growth seems to be steady and was positively impacted by strength across all its business segments and higher software revenues.

Furthermore, the company’s strategy of focusing on product refreshes is encouraging. Moreover, better execution and focus on enterprise and service providers will help F5 Networks gain share in the application delivery controller market, thereby boosting its top and bottom line performances.

Nevertheless, a volatile spending atmosphere and competition from Juniper Networks Inc. JNPR remain concerns.

Earnings Whispers

Our proven model does not conclusively show that F5 Networks will beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.53. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: F5 Networks’ Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

F5 Networks Inc. Price and EPS Surprise

F5 Networks Inc. Price and EPS Surprise | F5 Networks Inc. Quote

Stocks to Consider

Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:

Seagate Technology Plc STX, with an Earnings ESP of +1.87% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Texas Instrument TXN, with an Earnings ESP of +1.24% and a Zacks Rank #3.

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Seagate Technology PLC (STX): Free Stock Analysis Report
 
F5 Networks Inc. (FFIV): Free Stock Analysis Report
 
Juniper Networks Inc. (JNPR): Free Stock Analysis Report
 
Texas Instruments Inc. (TXN): Free Stock Analysis Report
 
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