What happened

Shares of F5 Networks (NASDAQ:FFIV) rose as much as 11.3% on Tuesday, lifted by an impressive fourth-quarter earnings report. At the end of the day, the application delivery specialist's stock closed 8.5% higher.

So what

Earnings fell 6% year over year to $2.43 per share. Revenue rose 4% to $615 million. Your average Wall Street analyst would have settled for earnings near $2.37 per share on sales in the vicinity of $606 million. Management also set up bullish guidance targets for the first quarter of the fiscal year 2021, citing a healthy customer interest in boosting their own business value with popular F5 solutions like the BIG-IP app delivery services and the Nginx platform.

A businessman points to a bar chart showing growth over time.

Image source: Getty Images.

Now what

Looking down the road, CFO Frank Pelzer said that software sales should increase by at least 35% in 2021, offset by a single-digit decline in hardware systems sales. The company is pivoting to a more lucrative business model based on subscription-style software and service contracts.

Despite the promising growth in F5's software sales, the stock is more of a value play than a high-flying tech darling these days. Share prices have fallen 10% in 2020, including Tuesday's jump, and can be bought at a very reasonable 12 times free cash flow and 13 times forward earnings estimates.