F5 Inc FFIV

F5 Earnings: Despite Macro Pressures, Customer Demand for F5’s Solutions Is Stabilizing

We are maintaining our $205 fair value estimate for narrow-moat F5 after the firm closed out the second quarter of fiscal 2024 with financial results roughly in line with our prior forecasts. While macro pressures continue to weigh down customer budgets, the firm continues to see stabilization in customer demand after a tough 2023. As in previous quarters, we remain impressed by the firm’s focus on profitability during the current period of macroeconomic uncertainty. We believe investors were left unimpressed with F5’s guidance for the upcoming quarter, resulting in the firm’s shares selling off sharply after its earnings report. While quarterly guidance implies a tough demand environment, the selloff is overly punitive. With the company’s shares trading down after hours, we view them as undervalued.