Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Networking or "cloud computing" stocks took a collective jump off the deep end after F5 Networks
So what: To be honest, earnings weren't all that bad as fellow fool Anders Bylund pointed out, but a revenue miss has spooked investors into thinking the growth story may not be as good as anticipated. Second-quarter revenue guidance of $275 million to $280 million was below estimates of $280.7 million, and the $700,000 difference is apparently enough to cause panic in the streets. A host of related companies including Riverbed Technology
Now what: Analysts put in overtime last night upgrading F5 after a sell-off in after-hours trading. Credit Suisse and Gleacher & Co. were among those to upgrade the stock. The danger with owning a high-growth stock is investors react skittishly to disappointing reports when there is an expectation that the stock will continue to crush expectations, such as what happened today. The sell-off looks to be a little overdone, especially for F5 Networks, and I expect shares to strengthen after the panic of this quarter has passed.
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