Why F5 Networks, SLM and Xilinx Are 3 of Today’s Worst Stocks

The stimulus from the European Central Bank is going to be even more potent than first presumed. This morning, ECB President Mario Draghi explained he’d be leading the central bank to buy back nearly $70 billion worth of European-based bonds per month … as long as was necessary.

U.S. investors loved the news, sending U.S. stocks up an average of 1.5%.

Not every name was riding the wave, though. SLM Corp (SLM), F5 Networks, Inc. (FFIV) and Xilinx, Inc. (XLNX) were all upended, mostly by alarming earnings news and outlooks.

F5 Networks (FFIV)

Why F5 Networks, Inc., SLM Corp. and Xilinx, Inc. Are 3 of Today's Worst StocksF5 Networks got walloped on Thursday, with shares falling nearly 10% after reporting disappointing Q1 numbers and an equally disappointing Q2 outlook.

Per share earnings were satisfactory. The company posted a profit of $1.55, versus estimates of $1.49. Sales were up 14% last quarter, reaching $462.8 million. The market, however, was expecting $467 million.

For the current quarter, F5 Networks expects to drive revenue of somewhere between $465 million and $475 million … a range that’s completely shy of analyst estimates for a top line of $479 million. The company also expects to drive a profit of $1.48 to $1.51 per share of FFIV stock for the current quarter — below the consensus of $1.53.

Even so, many analysts remain optimistic on FFIV stock. Cantor Fitzgerald’s Brian White said of the numbers:

“Despite the hiccup in F5’s 1Q:FY15 results, we continue to believe the company’s strategy is resonating very well with both customers and partners, while the gap between F5 and its competitors has never been wider. In fact, the company remains very upbeat about the strength of its pipeline. During 1Q:FY15, F5’s Product sales grew slower (up 10% YoY) than Service revenue growth (up 18%). Product revenue in 1Q:FY15 came in at $240.9 million and was softer than our $255.5 million estimate, and Service sales reached $221.9 million versus our $212.3 million projection.”

SLM Corp. (SLM)

SLM Corp., better known as student loan agency Sallie Mae, saw its shares fall nearly 7% after posting disappointing Q4 results. Specifically, the company earned 3 cents per share, versus a profit of 14 cents per share of SLM stock in the same quarter a year earlier. GAAP net income fell from $61 million a year ago to $20 million this time around.

The real damage may have been done, however, by the 2015 outlook. SLM Corp. foresees earnings of 48 cents to 50 cents per share of SLM stock this year, versus the consensus estimate of 65 cents.

Xilinx (XLNX)

The good news: Xilinx topped last quarter’s earnings estimates by a penny. The bad news: That’s the only good news the company was able to offer today.

In its fiscal third quarter, Xilinx earned 62 cents per share, versus average expectations of 61 cents per share of XLNX stock. Revenue of $593.5 million, however, was shy of the estimated figure if $617 million. The Q3 results were barely better than the year-ago numbers, but Xilinx undermined that silver lining by dialing down its fourth quarter outlook. The chip maker now expects to generate sales between $558 million and $582 million for the current quarter, well short of consensus estimates of $617 million.

The death blow came when Drexel Hamilton downgraded XLNX stock from a “buy” to a “hold,” lowering its price target to $20. Shares closed at $38.95 today, down more than 6%.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/01/f5-networks-slm-xilinx-3-todays-worst-stocks/.

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