Business Corpus: F5 Stock Falls As Pricey Software Acquisition Gets Mixed Analyst ReviewsF5 Networks' biggest acquisition ever, the $670 million purchase of private software firm NGINX announced late Monday, met with mixed reviews from analysts. F5 stock fell on Tuesday. The post F5 Stock Falls As Pricey Software Acquisition Gets Mixed Analyst Reviews appeared first on Investor's Business Daily.

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F5 Networks' (FFIV) biggest acquisition ever, the $670 million purchase of private software firm NGINX, met with mixed reviews from analysts on Tuesday. F5 stock fell on word of the deal.

Late Monday, Seattle-based F5 agreed to pay cash for NGINX, a provider of open-source application delivery software. F5 Networks makes application delivery controllers that direct data traffic to computer servers.

According to a Piper Jaffray analyst, Citrix Systems (CTXS) also was in talks to buy NGINX.

JPMorgan downgraded F5 to neutral. Following the deal, F5 said it will suspend its share repurchase plan.

Does Acquisition Open Door To Amazon Web Services?

NGINX had about $26 million in revenue in 2018. Its software runs on Amazon Web Services, the cloud computing unit of Amazon.com (AMZN). The acquisition will dilute earnings in 2019 and 2020.

"Bulls would argue F5 is integrating a fast-growing software company that it can now leverage across its global installed base, while bears would argue this was a defensive move to leapfrog internal efforts with F5's multi-cloud strategy, particularly around AWS," KeyBanc Capital Markets analyst Alex Kurtz said in a report to clients.

F5 stock fell 7.7% to close at 149.65 on the stock market today.

"This is by far F5's largest acquisition to date, and the hefty multiple paid and projected earnings dilution speak to the apparent urgency at F5 to drive revenue growth and better address next-generation applications and the influential DevOps community," William Blair analyst Jason Ader said in his note to clients.

With Tuesday's loss, F5 stock is about even with its year-ago price.

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The post F5 Stock Falls As Pricey Software Acquisition Gets Mixed Analyst Reviews appeared first on Investor's Business Daily.