F5 cut to Hold at Needham on disclosed network breach

As previously reported, Needham analyst Ryan Koontz downgraded F5 (FFIV) to Hold from Buy. The company’s Q4 results topped estimates as metrics impressed, with hardware sales delivering another 14-year record and strong global government performance despite soft US Federal bookings, the analyst tells investors in a research note. F5’s momentum from enterprise DC modernization, strong renewals, and technology refresh, though, appears stalled due to its disclosed network breach and the US Federal shutdown pushing out deals, the firm added. Given the growing enterprise interest in shifting cloud investment into AI, Needham states that it has lacked high conviction in F5 going into Q4, and now with deal slips, the firm is holding “deeper concern” given the stock’s valuation run.