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F5 Networks (FFIV)
NASDAQ:FFIV

F5 Networks (FFIV) AI Stock Analysis

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F5 Networks

(NASDAQ:FFIV)

Rating:83Outperform
Price Target:
$342.00
▲(15.49%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
AI and Modernization
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 Expansion
An easing competitive environment is driving a strong refresh of legacy products and expansions to its flagship BigIP to meet growing demand for enterprise private cloud capacity.
Negative Factors
Software Segment
Flat growth in Software makes it difficult to forecast the model and gain confidence in future growth.
Temporary Growth Factors
Most of the growth drivers are bolstered by temporary factors.
Valuation Concerns
The stock is trading at its historical high P/E multiple, which raises concerns about valuation.

F5 Networks (FFIV) vs. SPDR S&P 500 ETF (SPY)

F5 Networks Business Overview & Revenue Model

Company DescriptionF5, 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 MoneyF5 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 Key Performance Indicators (KPIs)

Any
Any
Gross Profit by Segment
Gross Profit by Segment
Chart InsightsF5 Networks' gross profit from Products has shown a notable recovery, particularly in late 2024, driven by a robust systems refresh cycle and new product innovations. This aligns with the 12% product revenue growth reported in the latest earnings call. The Services segment continues its steady upward trajectory, bolstered by strong international performance and sustained demand for data center modernization. Despite flat software revenue, the overall positive sentiment and raised fiscal guidance reflect confidence in ongoing growth and strategic initiatives like the F5 Application Delivery and Security Platform.
Data provided by:Main Street Data

F5 Networks Earnings Call Summary

Earnings Call Date:Apr 28, 2025
(Q2-2025)
|
% Change Since: 11.71%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Positive
F5 Inc. reported strong financial results with significant revenue and EPS growth, driven by a robust systems refresh cycle, new product innovations, and strong international performance. Despite flat software revenue and potential challenges in the U.S. federal market due to budget uncertainties, the overall sentiment of the call was positive, supported by raised guidance and record cash flow.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
F5 delivered 7% total revenue growth, including 12% product revenue growth. Systems revenue grew 27%, while software revenue was flat with the year-ago quarter.
Record Non-GAAP EPS
Non-GAAP EPS of $3.42, representing 18% year-over-year growth, $0.28 above the top end of guidance range.
Raised FY '25 Revenue Guidance
F5 raised its guidance for FY '25 revenue growth to a range of 6.5% to 7.5%, up from the prior range of 6% to 7%.
Introduction of F5 ADSP
The launch of the F5 Application Delivery and Security Platform, converging high-performance load balancing and traffic management with advanced app and API security capabilities.
Strong International Growth
EMEA delivered 20% growth, representing 29% of revenue, and APAC grew 3%, representing 17% of revenue.
Record Cash Flow
Generated a record $257 million in cash flow from operations in Q2.
Negative Updates
Flat Software Revenue
Software revenue of $158 million was flat due to the smallest subscription renewal base of the year.
Potential Impact of Fed Budget Disruptions
Concerns over potential disruptions in the U.S. federal government market due to budget uncertainties.
Company Guidance
During F5's fiscal 2025 Q2 earnings call, the company reported a 7% increase in total revenue, with product revenue growing by 12% and systems revenue rising by 27%, while software revenue remained flat compared to the previous year. The company also posted a non-GAAP EPS of $3.42, marking an 18% year-over-year growth. F5 anticipates Q3 revenue to be between $740 million and $760 million, indicating approximately 8% growth at the midpoint. Furthermore, the company raised its fiscal year 2025 revenue growth guidance to a range of 6.5% to 7.5%, up from the previous 6% to 7%, reflecting the strong performance in the first half of the year. The guidance update considers sustained demand for data center modernization, competitive displacement momentum, and a robust software subscription renewal base.

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
85
Very Positive
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
80
Positive
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
90
Very Positive
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.
BreakdownTTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue2.94B2.82B2.81B2.70B2.60B2.35B
Gross Profit2.38B2.26B2.22B2.16B2.11B1.94B
EBITDA826.13M774.24M636.40M539.51M509.45M564.00M
Net Income621.35M566.78M394.95M322.16M331.24M307.44M
Balance Sheet
Total Assets5.91B5.61B5.25B5.28B5.00B4.68B
Cash, Cash Equivalents and Short-Term Investments1.26B1.07B803.32M884.57M910.61M1.21B
Total Debt236.62M249.56M280.99M664.67M715.28M773.05M
Total Liabilities2.59B2.48B2.45B2.81B2.64B2.45B
Stockholders Equity3.31B3.13B2.80B2.47B2.36B2.23B
Cash Flow
Free Cash Flow834.36M762.01M599.23M409.01M614.54M600.96M
Operating Cash Flow864.84M792.42M653.41M442.63M645.20M660.90M
Investing Cash Flow-42.77M-59.21M36.39M218.12M-445.33M-747.00M
Financing Cash Flow-465.14M-457.00M-653.30M-476.51M-468.28M337.24M

F5 Networks Technical Analysis

Technical Analysis Sentiment
Positive
Last Price296.12
Price Trends
50DMA
282.56
Positive
100DMA
279.35
Positive
200DMA
262.06
Positive
Market Momentum
MACD
3.26
Positive
RSI
59.22
Neutral
STOCH
64.75
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 296.12 is above the 20-day moving average (MA) of 292.60, above the 50-day MA of 282.56, and above the 200-day MA of 262.06, indicating a bullish trend. The MACD of 3.26 indicates Positive momentum. The RSI at 59.22 is Neutral, neither overbought nor oversold. The STOCH value of 64.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FFIV.

F5 Networks Risk Analysis

F5 Networks disclosed 39 risk factors in its most recent earnings report. F5 Networks reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

F5 Networks Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
83
Outperform
$17.00B28.1219.89%5.61%26.65%
79
Outperform
$78.40B42.07205.91%13.83%58.13%
78
Outperform
$131.75B112.7221.16%13.91%-50.96%
74
Outperform
$122.65B721.64-5.76%25.94%-226.80%
ZSZS
72
Outperform
$47.85B-2.68%25.46%49.20%
67
Neutral
$25.42B34.25245.70%7.93%-56.44%
63
Neutral
$33.24B5.92-11.55%1.90%5.54%-20.14%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FFIV
F5 Networks
296.12
124.49
72.53%
FTNT
Fortinet
102.21
41.12
67.31%
PANW
Palo Alto Networks
196.97
25.93
15.16%
GDDY
GoDaddy
175.43
31.45
21.84%
ZS
Zscaler
309.33
107.68
53.40%
CRWD
CrowdStrike Holdings
496.10
106.42
27.31%

F5 Networks Corporate Events

Executive/Board ChangesFinancial Disclosures
F5 Networks Announces Board Changes and Strong Q2 Results
Positive
Apr 28, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 05, 2025