Tuesday, June 20, 2006

Calls of Note Part 7

- WR Hambrecht notes they recently completed a round of channel checks that yielded strong indications that F5 Networks (NASDAQ:FFIV)' June quarter remains on track. Firm spoke with numerous F5 Networks' resellers in North America and Europe, many of whom cited a strong demand environment and a resurgence in sales following what they believe was a slow start to the quarter.

Specifically, checks confirmed that the Company has a couple of multi-million dollar WAN optimization deals in the works. Further, concerns in early May around the potential for Cisco Systems' (CSCO) competitive tactics to temporarily stall the market following its ACE module announcement have not materialized as they thought they might.

With FFIV shares off over 35% from their high set in late March and trading at 16x 2007 EPS estimate ex-cash, they believe current levels represent a compelling entry point and encourage investors to create or add to current positions. $68 price target reflects a 25x multiple applied to fully taxed 2007 operating EPS estimate plus $10/share in cash.

Notablecalls: Not actionable but good to know category

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