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F5 Inc FFIV

Morningstar Rating
$189.97 +2.75 (1.47%)
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Company Report

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.

Price vs Fair Value

FFIV is trading at a 7% discount.
Price
$189.97
Fair Value
$115.00
Uncertainty
High
1-Star Price
$271.12
5-Star Price
$487.00
Economic Moat
Bfxbdxy
Capital Allocation
Nhmxbjrq

Bulls Say, Bears Say

Bulls

F5's leading install base could make it the first choice for customers pursuing the high growth areas of software and cloud-based solutions for application and traffic management.

Bears

Customers may forgo F5 products as their workloads are deployed into cloud environments, which shrinks F5's addressable market.

Is it the right time to buy, sell, or hold?
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News

Trading Information

Previous Close Price
$187.22
Day Range
$186.88190.18
52-Week Range
$127.05190.18
Bid/Ask
$189.96 / $190.04
Market Cap
$11.17 Bil
Volume/Avg
343,216 / 435,534

Key Statistics

Price/Earnings (Normalized)
14.99
Price/Sales
4.07
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
4.12%

Company Profile

F5 is a market leader in the application delivery controller market. The company sells products for security, application performance, and automation. Its three customer verticals are enterprises, service providers, and government entities. Revenue is evenly split between its services business and products business with revenue trending toward products due to software adoption. The Seattle-based firm was incorporated in 1996, has about 6,500 employees, and generates about 55% its revenue within the Americas, 25% in EMEA, and 20% in APAC/Japan.
Sector
Technology
Industry
Software - Infrastructure
Stock Style Box
Mid Core
Total Number of Employees
6,524

Competitors

Valuation

Metric
FFIV
FSLY
AKAM
Price/Earnings (Normalized)
14.9917.75
Price/Book Value
3.901.913.62
Price/Sales
4.073.584.49
Price/Cash Flow
15.1725.7711.58
Price/Earnings
FFIV
FSLY
AKAM

Financial Strength

Metric
FFIV
FSLY
AKAM
Quick Ratio
1.123.001.90
Current Ratio
1.293.142.16
Interest Coverage
−36.4035.30
Quick Ratio
FFIV
FSLY
AKAM

Profitability

Metric
FFIV
FSLY
AKAM
Return on Assets (Normalized)
14.62%−1.26%10.83%
Return on Equity (Normalized)
27.92%−2.24%22.08%
Return on Invested Capital (Normalized)
25.22%−2.22%11.58%
Return on Assets
FFIV
FSLY
AKAM
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