F5 Networks (FFIV) AI Stock Analysis

• Market Cap: $17.27B
• Dividend Yield: N/A
• Average Volume (3M): 436.88K
• Price to Earnings (P/E): 28.5
• Beta (1Y): 0.86
• Revenue Growth: 5.61%
• EPS Growth: 26.65%
• Country: US
• Employees: 6,114
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Infrastructure
• EPS (TTM): 3.42
• Shares Outstanding: 57,431,570
• 10 Day Avg. Volume: 417,574
• 30 Day Avg. Volume: 436,881
• PEG Ratio: 5.82
• Price to Book (P/B): 5.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.75
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 2.09
• Enterprise Value/Gross Profit: 10.28
• Enterprise Value/Ebitda: 6.99
• 1Y Price Target: $299.70
• Price Target Upside: -0.74% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 83 Outperform
• Price Target: $342.00 ▲(13.27%Upside)

F5 Networks' overall strong financial position and positive earnings call sentiment are the primary drivers of its high score. The company's technical indicators show positive momentum, though caution is advised due to potential overbought conditions. Valuation factors slightly detract from the score due to a high P/E ratio and no dividend yield.

Positive Factors

Earnings Performance

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

Product Innovation

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

Negative Factors

Revenue Sustainability

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.

Software Segment Challenges

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

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 through the sale of software and hardware products, as well as associated maintenance and support services. The company's primary revenue streams include sales of its BIG-IP product line, which offers application delivery services such as load balancing, traffic management, and security features. Additionally, F5 Networks earns income from its subscription-based software offerings and cloud-based solutions, which provide scalable and flexible options for customers looking to manage applications across hybrid environments. Partnerships with major cloud providers and technology companies also play a significant role in expanding F5's market reach and enhancing its product offerings. The company's focus on delivering comprehensive application services that improve security and performance positions it as a key player in the application delivery and cybersecurity space.

F5 Networks Financial Statement Overview

Summary

F5 Networks maintains strong financial performance, characterized by high profitability, low leverage, and robust cash flow generation. The company demonstrates stable margins despite a slight revenue decline, indicating efficient cost management and operational efficiency.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 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
EBITDA	774.24M	636.40M	539.51M	509.45M	564.00M
Net Income	566.78M	394.95M	322.16M	331.24M	307.44M
Balance Sheet
Total Assets	5.61B	5.25B	5.28B	5.00B	4.68B
Cash, Cash Equivalents and Short-Term Investments	1.07B	803.32M	884.57M	910.61M	1.21B
Total Debt	249.56M	280.99M	664.67M	715.28M	773.05M
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: 301.93
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 301.93 is above the 20-day moving average (MA) of 297.41, above the 50-day MA of 291.98, and above the 200-day MA of 268.10, indicating a bullish trend. The MACD of 2.64 indicates Positive momentum. The RSI at 58.55 is Neutral, neither overbought nor oversold. The STOCH value of 62.30 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	83 Outperform	$17.27B	28.55	19.89%	―	5.61%	26.65%
FTNT	74 Outperform	$80.19B	43.12	205.91%	―	13.83%	58.13%
PANW	74 Outperform	$134.13B	115.11	21.16%	―	13.91%	-50.96%
CRWD	74 Outperform	$115.03B	721.64	-5.76%	―	25.94%	-226.80%
ZS	72 Outperform	$44.12B	―	-2.68%	―	25.46%	49.20%
GDDY	67 Neutral	$23.69B	31.92	245.70%	―	7.93%	-56.44%
Sector *	63 Neutral	S$645.08M	16.18	0.69%	4.13%	0.35%	-29.83%

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.