F5 Networks (FFIV) AI Stock Analysis

• Market Cap: $15.26B
• Dividend Yield: N/A
• Average Volume (3M): 609.25K
• Price to Earnings (P/E): 25.1
• Beta (1Y): 0.89
• Revenue Growth: 5.61%
• EPS Growth: 26.65%
• Country: US
• Employees: 6,491
• Sector: Technology
• Sector Strength: 65
• Industry: Software - Infrastructure
• EPS (TTM): 10.53
• Shares Outstanding: 57,652,256
• 10 Day Avg. Volume: 623,952
• 30 Day Avg. Volume: 609,253
• PEG Ratio: 0.94
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.48
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $287.56
• Price Target Upside: 8.20% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

F5 Networks scores a solid 79, driven by strong financial performance and positive earnings call outcomes. The company's robust cash flow, low leverage, and raised guidance are significant strengths. Technical analysis indicates mixed signals, cautioning potential overbought conditions. Valuation concerns arise due to a relatively high P/E ratio and lack of dividend yield, suggesting some caution in terms of stock price attractiveness.

Positive Factors

AI Use Cases

Emerging AI use cases and share gain opportunities are encouraging and provide confidence in earnings power.

Earnings

Delivered strong results with revenue and EPS surpassing consensus estimates, and provided upside to future guidance.

Product Revenue

Revenue grew 11% yr-yr to $766.5M and beat consensus by 7% driven by accelerating Product Revenue growth.

Negative Factors

Software Growth

Flat growth in Software makes it difficult to forecast the model and gain confidence in future growth.

Sustainability of Growth

Hardware growth of 27% is not sustainable, as some growth is driven by easy comps with last year’s growth of -32% YoY and pull forward ahead of any tariff impacts.

Valuation Concerns

The stock is trading at its historical high P/E multiple, which raises concerns about valuation.

F5 Networks Business Overview & Revenue Model

Company Description

F5, Inc. provides multi-cloud application security and delivery solutions for the security, performance, and availability of network applications, servers, and storage systems. The company's multi-cloud application security and delivery solutions enable its customers to develop, deploy, operate, secure, and govern applications in any architecture, from on-premises to the public cloud. It offers application security and delivery products, including BIG-IP appliances and VIPRION chassis and related software modules and software-only Virtual Editions; Local Traffic Manager and DNS Services; Advanced Firewall Manager and Policy Enforcement Manager that leverage the unique performance characteristics of its hardware and software architecture; Application Security Manager and Access Policy Manager; NGINX Plus and NGINX Controller; Shape Defense and Enterprise Defense; Secure Web Gateway, and Silverline DDoS and Application security offerings; and online fraud and abuse prevention solutions. The company also provides a range of professional services, including consulting, training, installation, maintenance, and other technical support services. F5, Inc. sells its products to large enterprise businesses, public sector institutions, governments, and service providers through distributors, value-added resellers, managed service providers, and systems integrators in the Americas, Europe, the Middle East, Africa, and the Asia Pacific region. It has partnerships with public cloud providers, such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform. The company was formerly known as F5 Networks, Inc. and changed its name to F5, Inc. in November 2021. F5, Inc. was incorporated in 1996 and is headquartered in Seattle, Washington.

How the Company Makes Money

F5 Networks generates revenue primarily through the sale of its software and hardware products, as well as associated services. The company's revenue streams include product sales, which encompass both application services and security solutions, and service revenue, which includes maintenance and support contracts. F5 also offers cloud-based solutions, contributing to its subscription-based revenue. Strategic partnerships with cloud service providers, technology integrators, and enterprise customers play a significant role in expanding its market reach and enhancing its revenue generation capabilities.

F5 Networks Financial Statement Overview

Summary

F5 Networks presents a commendable financial position characterized by high profitability, low leverage, and strong cash flow generation. The company's consistent margins and growth in free cash flow highlight its operational efficiency and financial stability, positioning it well within the competitive software infrastructure industry.

Income Statement

F5 Networks shows a strong financial performance in the TTM period with a gross profit margin of 84.97% and a net profit margin of 22.20%. The company maintains stable profitability as indicated by an EBIT margin of 25.65% and an EBITDA margin of 28.64%. Although there was a slight decline in revenue compared to the previous annual period (-0.61%), the overall margins reflect efficient cost management and high profitability.

Balance Sheet

The company exhibits a solid balance sheet with a debt-to-equity ratio of 0.07, indicating low leverage and financial stability. Return on equity stands at 18.75%, showcasing effective use of shareholder funds. An equity ratio of 56.11% further reinforces the company's strong equity position, ensuring stability and reduced financial risk.

Cash Flow

F5 Networks demonstrates robust cash flow generation with a free cash flow growth rate of 15.33% in the TTM period. The operating cash flow to net income ratio is 1.46, indicating strong cash flow relative to net income, while the free cash flow to net income ratio of 1.41 reflects the company's ability to generate substantial free cash flow from its operations.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
2.82B	2.81B	2.70B	2.60B	2.35B
	Gross Profit
2.26B	2.22B	2.16B	2.11B	1.94B
	EBIT
675.48M	537.96M	417.88M	445.92M	415.37M
	EBITDA
774.24M	636.40M	539.51M	394.02M	564.00M
	Net Income Common Stockholders
566.78M	394.95M	322.16M	331.24M	307.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.07B	803.32M	884.57M	910.61M	1.21B
	Total Assets
5.61B	5.25B	5.28B	5.00B	4.68B
	Total Debt
249.56M	239.56M	622.15M	665.99M	727.04M
	Net Debt
-825.04M	-557.60M	-135.86M	85.02M	-122.52M
	Total Liabilities
2.48B	2.45B	2.81B	2.64B	2.45B
	Stockholders Equity
3.13B	2.80B	2.47B	2.36B	2.23B
Cash Flow		Free Cash Flow
762.01M	599.23M	409.01M	614.54M	600.96M
	Operating Cash Flow
792.42M	653.41M	442.63M	645.20M	660.90M
	Investing Cash Flow
-59.21M	36.39M	218.12M	-445.33M	-747.00M
	Financing Cash Flow
-457.00M	-653.30M	-476.51M	-468.28M	337.24M

F5 Networks Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 265.77
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FFIV, the sentiment is Positive. The current price of 265.77 is above the 20-day moving average (MA) of 258.22, below the 50-day MA of 268.96, and above the 200-day MA of 242.29, indicating a neutral trend. The MACD of -0.48 indicates Negative momentum. The RSI at 51.82 is Neutral, neither overbought nor oversold. The STOCH value of 70.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FFIV.

F5 Networks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FFIV	79 Outperform	$15.26B	25.13	19.89%	―	5.61%	26.65%
FTNT	76 Outperform	$79.79B	45.91	338.74%	―	12.27%	54.69%
CRWD	76 Outperform	$107.05B	721.64	-0.69%	―	29.39%	-119.62%
PANW	74 Outperform	$123.33B	105.23	23.38%	―	13.86%	-46.44%
ZS	74 Outperform	$35.13B	―	-1.21%	―	27.77%	89.39%
GDDY	67 Neutral	$26.01B	29.18	248.42%	―	7.82%	-32.24%
Sector *	59 Neutral	$10.75B	10.37	-6.64%	3.00%	7.30%	-12.02%

F5 Networks Corporate Events

F5 Networks Announces Board Changes and Strong Q2 Results

On April 25, 2025, F5 Networks announced the resignation of Peter Klein from its Board of Directors, with Julie Gonzalez appointed as the new Chair of the Audit Committee. The company also reported strong financial results for Q2 FY25, with a 7% revenue growth driven by innovation in hybrid multicloud solutions, achieving $731 million in revenue and significant growth in systems revenue. F5 raised its revenue and earnings guidance for FY25, reflecting its continued market leadership and demand for its solutions.

Spark’s Take on FFIV Stock

According to Spark, TipRanks’ AI Analyst, FFIV is a Outperform.

F5 Networks’ strong financial performance and positive earnings call results are key strengths, highlighting robust revenue growth and profitability. The company shows promise with raised revenue expectations and growth in AI opportunities. However, technical analysis suggests a cautious stance due to mixed indicators, and the valuation suggests potential overvaluation. Overall, F5 Networks demonstrates solid growth potential, albeit with some caution regarding future expansion rates and market valuation.

To see Spark’s full report on FFIV stock, click here.