F5 nosedives as Wall Street worries over Chinese data breach

[F5 Networks corporate headquarters in Silicon Valley]
Sundry Photography

F5 (NASDAQ:FFIV [https://seekingalpha.com/symbol/FFIV]) was in the spotlight on Tuesday as the networking company's weaker-than-expected guidance [https://seekingalpha.com/news/4508998-f5-tumbles-as-chinese-security-breach-weighs-on-guidance] left Wall Street firms with the belief that the fallout from the recent security breach is just beginning.

Shares fell 10% in premarket trading.

“With revenue growth expected to slow and recently introduced headwinds including a disclosed network breach and the US Federal Government shutdown, we believe the company's current refresh cycle is likely to delay beyond management's expectations, damaging the company's ability to exceed near-term expectations,” Needham analyst Ryan Koontz wrote in a note to clients. “The company's security breach in particular may allow competitors to win new opportunities, ultimately hurting FFIV overall positioning as the market leader.” Koontz downgraded F5 to Hold from Buy and removed his $345 price target.

Morgan Stanley analyst Meta Marshall cut her price target to $336 from $352, but suggested that investor confidence may be shaken at this point in time.

“With the breach now resetting valuation, we do feel like there is a greater opportunity to get involved in the business, particularly given early checks that the breach is being handled well,” Marshall wrote in a note to clients. “While we think that, we are perfectly happy on the sidelines for the next couple of months as we assess the full impact, making sure there are no residual impacts.”

Marshall continued: “[It's] early days, [and] the company is handling the breach well and customers are generally happy. However, with the breach hitting source code and exposure being over a year in nature, we are still assessing how big of an impact the breach will have. We would note that the company is extending CrowdStrike EDR service to customers and has appointed security expert Michael Montoya as CTO in the interim to put the focus further on security (new CISO and head of IT as well). While ~$100mm of potential impact to results likely embeds enough conservatism for now, we are on the lookout as to whether breach impact expands.”

Several other firms also cut their price targets on F5 after the results and guidance, including Barclays and Piper Sandler, which moved to $267 and $277 from $321 and $355, respectively.

MORE ON F5 NETWORKS

* F5, Inc. (FFIV) Q4 2025 Earnings Call Transcript [https://seekingalpha.com/article/4833804-f5-inc-ffiv-q4-2025-earnings-call-transcript]
* F5, Inc. 2025 Q4 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4833828-f5-inc-2025-q4-results-earnings-call-presentation]
* F5, Inc.: Great Business, Stretched Valuation [https://seekingalpha.com/article/4825501-f5-inc-great-business-stretched-valuation]
* F5 tumbles as Chinese security breach weighs on guidance [https://seekingalpha.com/news/4508998-f5-tumbles-as-chinese-security-breach-weighs-on-guidance]
* F5 Networks Non-GAAP EPS of $4.39 beats by $0.42, revenue of $810M beats by $14.52M [https://seekingalpha.com/news/4508961-f5-networks-non-gaap-eps-of-4_39-beats-by-0_42-revenue-of-810m-beats-by-14_52m]