F5 Earnings: Demand Stabilizing but Budgets Remain Constrained; Valuation up to $205 From $180

We are raising our fair value estimate to $205 per share from $180 per share for narrow-moat F5 after the firm began fiscal year 2024 materially outperforming our expectations for revenue and earnings. While customer budgets have not normalized, management has seen more predictable demand and almost no late cancelations or extra approval layers in recent deals. We think F5’s top line is positioned to accelerate. The market agreed with our sentiment in afterhours trading, sending shares up about 9%. We view shares as fairly valued at current prices and think F5 is an interesting name to monitor over the next few quarters.