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F5 Networks, Inc. Message Board

  • moneynow27 moneynow27 Oct 23, 2013 5:02 PM Flag

    After reviewing the ER report, my observation is

    that I don't think the stock will make it over $90 tomorrow, and it may be a short from here. Now the CFO says margins will decline next year......Trust me, that's not good for the stock.

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    • Wrong. It will be ok and it will climb. The margins are in the low 80% . Sure they will come down eventually. What other company can you site that has that positive cash flow

      Sentiment: Strong Buy

    • "Trust me....."

      Funny - when someone says "trust me" - it usually means the exact opposite. Case in point here.

      What mgmt actually said is that they are investing in growing their consulting business - which helps them push more high margin product. Consulting carries lower margin, so the increase in the lower margin business could have a slight negative impact on gross margin - based on mix. But as it is incremental revenue, it means an increase in gross profits, operating margin, and EPS.

      In terms of operating margin, the company expects low 30's for Op margin in the 1H'14, and high 30's in the 2H'14 - which is in line-to-above FFIV'S historical operating margins.


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