FFIV — F5, Inc.
Snapshot dated August 31, 2026.
F5, Inc. specializes in multi-cloud application security and delivery, providing hardware, software, and SaaS solutions that ensure applications are fast, available, and secure. Its technology portfolio includes the BIG-IP family of products for application delivery controllers, as well as NGINX for modern application infrastructure and web server software. The company operates through a subscription-based model that prioritizes recurring revenue, serving enterprise-level clients, service providers, and government agencies worldwide. F5 maintains a significant market presence in application traffic management, competing primarily with companies like Citrix and various cloud-native security providers. With thousands of employees globally, the company serves a vast customer base primarily composed of large enterprises that manage complex, hybrid-cloud environments. Recently, F5 has shifted its strategic focus toward enhancing its AI-powered security offerings to protect organizations against evolving cyber threats within distributed application architectures.
Fair Value / Share
$238.67
Price on August 31, 2026
$407.30
Upside to fair value
-41.4%
Data by Equibles and SEC filings. Figures are as of August 31, 2026 and are not live.
Earnings Yield
Earnings Yield shows how much profit a company generates relative to its share price. EPS ÷ Stock Price.
Stock Price
$407.30
Market Cap
$23,440,115,000
Net Income (TTM)
$726,510,000
Diluted Shares
57.5 million
EPS (TTM)
$12.62
Earnings Yield
3.1%
AI Analysis
With an EPS (TTM) of $12.62 and a stock price of $407.30, F5, Inc. currently has an earnings yield of 3.10%. This figure sits below the 4-5% annual return typically available from safe, guaranteed alternatives like bonds. Mechanically, this yield implies that the market is pricing in expectations for future earnings growth rather than relying solely on the current income stream. For the earnings yield to increase, the stock price would need to decline or the company would need to generate higher annual net income relative to its current valuation. This single measure does not capture the company’s debt levels, specific operational risks, or the competitive dynamics of the software and networking industries.
Return on Capital
EBIT ÷ (Net Working Capital + Net Fixed Assets) — how efficiently the business turns capital into profit.
EBIT (TTM)
$812,125,000
Net Working Capital
-$428,975,000
Net Fixed Assets
$197,284,000
Invested Capital
-$231,691,000
Return on Capital
Capital-free operations
This business operates on negative invested capital — customers pay in advance, so the business funds itself rather than tying up capital. Combined with positive EBIT, that is the strongest possible outcome in this framework, not a missing result.
AI Analysis
For F5, Inc. (FFIV), the business generated an EBIT of $812.1M against an invested capital figure of -$231.7M, which is the sum of -$429M in net working capital and $197.3M in net fixed assets. Because invested capital is negative while EBIT is positive, the Return on Capital is mathematically undefined; however, this represents the strongest outcome within this framework. It indicates that the company operates in a way that generates profit without requiring the business to tie up its own capital, effectively allowing customers or suppliers to fund operations through mechanisms like deferred revenue. This measure focuses strictly on tangible operating capital and does not capture the value of intangible assets like intellectual property, which can be significant drivers of performance even when tangible capital requirements remain minimal.
Acquirer's Multiple
Enterprise Value ÷ Operating Earnings — how many years of operating earnings it would take to buy the whole business.
| Company | Operating earnings | Enterprise value | Multiple |
|---|---|---|---|
| FFIVF5, Inc. | $812.1M | $21.8B | 26.9x |
| CSCOCisco Systems, Inc. | $14.2B | $464.1B | 32.7x |
| NETCloudflare, Inc. | -$354.4M | $109.8B | — |
Where FFIV sits: 26.9x against a peer median of 32.7x (peers: 32.7x) — 17.8% below the median.
Show the enterprise value bridge for each companyHide the enterprise value bridge
FFIV
Debt $0. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $252.4M of operating lease liabilities as of 2026-06-30 ($218.7M non-current, $33.7M current). These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
NET
Named as a competitor: competes in web application firewalls, API security, and multi-cloud application delivery services
Debt $3.3B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $259.1M of operating lease liabilities as of 2026-06-30 ($180.8M non-current, $78.2M current). These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
CSCO
Named as a competitor: competes in enterprise networking, application performance monitoring, and security infrastructure
Debt $31.3B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $1.7B of operating lease liabilities as of 2026-04-25 ($1.3B non-current, $410M current). These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
Operating earnings — FFIV
AI Analysis
F5, Inc. (FFIV) has an enterprise value of $21.8B and operating earnings of $812.1M, resulting in an Acquirer's Multiple of 26.9x. Its competitor, Cisco Systems (CSCO), has an enterprise value of $464.1B and operating earnings of $14.2B, resulting in a multiple of 32.7x. The third competitor, Cloudflare (NET), has an enterprise value of $109.8B and negative operating earnings of -$354.4M; it is losing money right now, so no multiple can be calculated for it. Among companies with a valid multiple, CSCO has the highest, while FFIV has the lowest. The computed comparison for FFIV is 26.9x against a peer median of 32.7x (peers: 32.7x) — 17.8% below the median. This measure evaluates the cost of operating earnings, but does not capture differences in capital intensity or future growth potential. The gap in multiples would shift if the companies' relative operational efficiency or debt loads changed, or if market expectations for their future profit generation diverged.
FS-Score
A 10-check read on financial health, across profitability, balance-sheet stability and operating momentum.
FS-Score
9/10
This company scores high on profitability, stability, and momentum.
Section 1
Current Profitability
3/3
Profitability is rated Strong as the company is generating positive accounting profits and even higher levels of cash flow relative to its asset base.
- Return on Assets is positive at 10.96%
- Free Cash Flow to Total Assets is positive at 14.34%
- The Accruals check shows cash flow from operations is 1.37 times larger than net income
This score indicates that current earnings are backed by cash; a decline in the cash-to-net-income ratio below 1 would weaken this pillar.
Return on Assets (ROA > 0)
PassFree Cash Flow to Total Assets (FCFTA > 0)
PassAccruals (CFO / Net Income > 1)
PassSection 2
Stability
3/3
Stability is rated Strong, driven by a lack of long-term debt and a reduction in the total share count over the last year.
- Long-term debt remained at 0, passing the leverage check
- The current ratio increased from 1.42 to 1.56
- Diluted shares outstanding decreased from 59.4 million to 58.7 million
The stability score remains high as long as the company avoids new long-term debt and continues to prevent shareholder dilution.
Change in Leverage (↓ or unchanged)
PassChange in Liquidity (↑ Current Ratio)
PassNet Dilution (annual diluted weighted-average shares, this year vs last)
PassSection 3
Recent Operational Improvements
3/4
Operational improvements are rated Strong, with the business expanding its margins and returns despite a slight dip in how efficiently it utilizes its assets.
- Return on Assets improved from 10.10% to 10.96%
- Free Cash Flow to Total Assets improved from 13.58% to 14.34%
- Gross Margin expanded from 80.20% to 81.41%
- Asset Turnover declined slightly from 0.5 to 0.49
This section would reach a perfect score if revenue growth accelerated enough to improve the asset turnover figure.
Change in ROA (↑)
PassChange in FCFTA (↑)
PassChange in Gross Margin (↑)
PassChange in Asset Turnover (↑)
FailFramework conclusion
The company earned an overall FS-Score of 9/10, with Strong ratings across all three pillars of profitability, stability, and operational improvements. This high score suggests that if the stock is trading at a low valuation, that pricing is more likely a result of market sentiment than of internal financial deterioration. The only signal not currently positive is asset turnover, which measures revenue generated per dollar of assets.
- Return on Assets of 10.96% indicates the company is profitable
- A 0 debt level ensures the leverage check passes
- The 1.37 accruals ratio shows that cash flow exceeds accounting net income
- Gross Margin improved to 81.41% over the prior year
Intrinsic Value (DCF)
A 10-year discounted cash flow, then the bridge from business value to value per share.
Reported cash flow → unlevered free cash flow
Free Cash Flow (reported)
$969.6M
+ After-Tax Interest Expense
$0
= Unlevered Free Cash Flow
$969.6M
Business value (10-year DCF)
PV of Years 1–10
$6.6B
PV of Terminal Value
$5.5B
= Business Value
$12.1B
Terminal value share
45.7%
Business value → share value
Intrinsic Value (business)
$12.1B
+ Cash & Equivalents
$1.6B
− Debt
$0
= Shareholders' Value
$13.7B
÷ Diluted Shares
57.5 million
= Fair Value / Share
$238.67
Divided by 57.5 million diluted shares — the weighted-average diluted count from the most recent quarterly income statement, for the quarter ended 2026-06-30.
Risk bucket → discount rate
mid (12%)
Year-1 FCF
$969.6M
Trailing twelve months.
FY2023 $599.2M · FY2024 $762M · FY2025 $906.4M
Growth rate (yrs 1–10)
5%
Terminal growth (after yr 10)
3%
AI Analysis
The valuation uses a 12% discount rate to represent mid-level risk, balancing the company's software transformation profile against its enterprise security operations. The 5.00% growth rate applied for the initial 10-year period captures recent cash flow performance normalized for historical volatility. This forecast utilizes a fixed Year-1 FCF of $969.6M, a rule applied consistently to all businesses. The terminal growth rate is fixed at 3%, and the resulting terminal value constitutes 45.7% of the total business value. To determine the fair value per share, the total business value of $12.1B is adjusted by adding $1.6B in cash and subtracting $0 of debt. This results in $13.7B of value belonging to the 57.5 million shares, yielding a fair value per share of $238.67. Against the current price of $407.30, the measure reflects a margin of safety of -41.40%, indicating the current trading price exceeds this model's estimate. This valuation is most sensitive to the 5.00% annual growth assumption; if the company's ability to maintain that cash flow trajectory shifts, the final fair value estimate would change accordingly.
Overall Verdict
How the five signals above stack up together, then the full synthesis.
Earnings Yield
3.1% vs ~4-5% bond-yield benchmark
Return on Capital
Capital-free operations — negative invested capital, positive EBIT
Acquirer's Multiple
26.9x against a peer median of 32.7x (peers: 32.7x) — 17.8% below the median.
FS-Score
9/10 — Financial rockstar
Intrinsic Value
-41.4% upside to fair value
The framework presents a clear divergence between F5, Inc.’s operational efficiency and its current market price. The business demonstrates strong performance metrics, with a 9/10 FS-Score and capital-free operations contributing to a green Return on Capital signal. Simultaneously, the Acquirer's Multiple sits 17.8% below the peer median of 32.7x, suggesting favorable positioning relative to comparable companies. However, this operational strength conflicts with the valuation data. The Earnings Yield of 3.1% is below the benchmark of 4-5%, and the Intrinsic Value check indicates a -41.4% margin of safety, signaling that current price levels are high relative to the projected discounted cash flows. This creates a structural tension where the company appears efficient and operationally robust, yet expensive according to cash flow and yield-based valuation metrics. A shift in the Intrinsic Value assessment would alter this picture most significantly, as it currently acts as the primary constraint on the valuation signals.
Comments
Notes from readers on FFIV — one each. Comments stay with the company, so they carry across to a later snapshot, and each one shows the date it was written.
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