What Happened?

Shares of network application delivery and security specialist F5 (NASDAQ:FFIV) jumped 15.5% in the morning session after the company reported impressive fourth-quarter results that blew past analysts' revenue, billings, and EPS expectations. Importantly, sales growth accelerated as the company highlighted its strong position to benefit from opportunities in the booming hybrid multi-cloud and AI markets. This likely powered the revenue forecast for the next quarter, which also outperformed Wall Street's estimates, though its EPS guidance fell short. Still, this quarter had some key positives.

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What The Market Is Telling Us

F5’s shares are not very volatile and have only had 3 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 6 months ago when the stock gained 14.5% on the news that the company reported strong second-quarter earnings. 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. 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 19.1% since the beginning of the year, and at $299.90 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 $2,387.

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