FFIV — F5, Inc.
Snapshot dated August 27, 2026.
F5, Inc. operates as a provider of multi-cloud application services, focusing on the security, delivery, and optimization of applications across hybrid, multi-cloud environments. The company generates revenue primarily through its BIG-IP hardware appliances and software-based BIG-IP Virtual Editions, alongside its NGINX application delivery and API management portfolio. Its business segments are organized around these integrated software and hardware solutions, which help enterprises manage traffic, improve performance, and secure applications against cyber threats. Customers range from large financial institutions and service providers to government agencies, supporting a global client base that relies on the company for infrastructure scalability. F5 maintains a prominent position in the application delivery controller market, competing against players such as Citrix and various cloud-native security vendors. Recently, the company has pivoted toward a software-centric model, emphasizing the expansion of its F5 Distributed Cloud Services to provide centralized management for applications spanning data centers and diverse cloud providers.
Fair Value / Share
$251.68
Price on August 27, 2026
$408.54
Margin of Safety
-38.4%
Data by Equibles and SEC filings. Figures are as of August 27, 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
$408.54
Market Cap
$23,511,477,000
Net Income (TTM)
$726,510,000
Diluted Shares
57.5 million
EPS (TTM)
$12.62
Earnings Yield
3.09%
AI Analysis
F5, Inc. currently displays an earnings yield of 3.09%, a figure derived from its EPS (TTM) of $12.62 and a stock price of $408.54. This return sits below the 4-5% benchmark offered by relatively safe, guaranteed alternatives like bonds. Mechanically, this lower yield implies that the current share price factors in expectations of future earnings growth or expansion, as investors are accepting a lower immediate return on existing earnings per share. For this yield to rise to meet or exceed the bond benchmark, either the share price would need to decrease, or the company would need to generate higher annual earnings per share. This calculation serves as a snapshot of current pricing expectations and does not capture future business risk or strategic pivots.
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., the framework identifies a highly efficient operational structure. With an EBIT of $812.1M and invested capital of -$231.7M—the sum of -$429M in net working capital and $197.3M in net fixed assets—the company operates with negative invested capital. While this results in a mathematically undefined return on capital percentage, it represents the strongest possible outcome under this framework: the business generates significant profit without requiring any of its own capital to sustain operations. This typically occurs when customers provide funds before services are delivered, effectively financing the business's ongoing activities. Because this metric focuses solely on operational capital efficiency, it does not capture broader strategic shifts or external macroeconomic pressures that might impact future profitability. If the business were to require significant physical expansion or changes in customer payment terms that forced it to hold higher inventory or carry larger receivables, the invested capital figure would rise, shifting the ratio.
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 | $21.9B | 27.0x |
| FTNTFortinet, Inc. | $2.4B | $121.2B | 49.6x |
| NETCloudflare, Inc. | -$354.4M | $108.7B | — |
Where FFIV sits: 27.0x against a peer median of 49.6x (peers: 49.6x) — 45.7% 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. It carries no separately reported lease obligations.
NET
Named as a competitor: Direct competitor in application delivery controllers, web application firewalls, and multi-cloud security services
Debt $3.3B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. It carries no separately reported lease obligations.
FTNT
Named as a competitor: Competes in hybrid networking, application security, and enterprise firewall solutions
Debt $496.9M. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. It carries no separately reported lease obligations.
Operating earnings — FFIV
AI Analysis
F5, Inc. (FFIV) has an enterprise value of $21.9B and operating earnings of $812.1M, resulting in an Acquirer's Multiple of 27.0x. Among the competitors, Cloudflare (NET) has an enterprise value of $108.7B and is losing money right now, so no multiple can be calculated. Fortinet (FTNT) has an enterprise value of $121.2B and operating earnings of $2.4B, resulting in an Acquirer's Multiple of 49.6x. Between the two companies with calculateable multiples, FFIV has the lower figure and FTNT has the higher figure. The computed comparison is 27.0x against a peer median of 49.6x (peers: 49.6x) — 45.7% below the median. The Acquirer's Multiple indicates the years of operating earnings required to purchase the business; this measurement does not capture potential growth rates or debt obligations, and the observed gap could close if the companies' operating margins converge or if their respective enterprise values shift based on different future expectations.
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
This section is Strong, as the company is generating positive accounting profits and even higher levels of cash flow relative to its total asset base.
- Return on Assets is positive at 10.96%
- Free Cash Flow to Total Assets is positive at 14.34%
- Accruals show cash-backed earnings with a ratio of 1.37
A score of 3/3 indicates that earnings are not only positive but are backed by actual cash inflows, which would only weaken if net income or operating cash flow were to fall below zero.
Return on Assets (ROA > 0)
PassFree Cash Flow to Total Assets (FCFTA > 0)
PassAccruals (CFO / Net Income > 1)
PassSection 2
Stability
3/3
This section is Strong, reflecting a debt-free balance sheet, increased liquidity, and a reduction in the total share count over the last year.
- Long-term debt remained flat at 0
- Current ratio increased from 1.42 to 1.56
- Diluted shares outstanding decreased from 59.4 million shares to 58.7 million shares
Stability is maintained here by avoiding new debt and dilution; a shift toward issuing new equity or a decline in the current ratio would lower this result.
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
This section is Strong, with the company showing year-over-year gains in its profitability margins and cash flow efficiency despite a slight dip in asset utilization.
- 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
Operational momentum is driven by margin expansion, though the failure to improve asset turnover suggests the company is generating slightly less revenue per dollar of assets than in the prior year.
Change in ROA (↑)
PassChange in FCFTA (↑)
PassChange in Gross Margin (↑)
PassChange in Asset Turnover (↑)
FailFramework conclusion
F5, Inc. earns an overall FS-Score of 9/10, driven by Strong results across all three pillars of profitability, stability, and operational improvement. This high score suggests that the company’s financial health is robust and that any perceived cheapness in the stock price is less likely to be the result of fundamental business deterioration. The score would only be higher if the company had also improved its asset turnover ratio over the last twelve months.
- Profitability is supported by a 10.96% Return on Assets
- Cash flow generation is efficient with a 14.34% Free Cash Flow to Total Assets ratio
- Shareholder dilution was avoided as shares fell to 58.7 million shares
- Gross Margin improved to 81.41%, indicating stable or improving pricing power
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
$6.8B
PV of Terminal Value
$6B
= Business Value
$12.9B
Business value → share value
Intrinsic Value (business)
$12.9B
+ Cash & Equivalents
$1.6B
− Debt
$0
= Shareholders' Value
$14.5B
÷ Diluted Shares
57.5 million
= Fair Value / Share
$251.68
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
Growth rate (yrs 1–10)
6%
Terminal growth (after yr 10)
3%
AI Analysis
The assessment applies a 12% discount rate, categorizing F5, Inc. as mid-risk due to its position in application delivery services, balanced by sensitivity to cyclical enterprise IT spending and cloud-native transitions. A growth rate of 6.00% is applied to the Year-1 FCF of $969.6M—a figure derived from the trailing-twelve-month data according to standard policy—to reflect the firm's cash flow recovery against historical trends. The model assumes a fixed terminal growth rate of 3%, which is applied across all companies in this framework to align with long-run economic expectations. The terminal value, representing the ongoing value of the business beyond the ten-year forecast, accounts for 46.9% of the total business value. To derive the fair value per share, the model calculates the present value of future cash flows and the terminal value, then adjusts for cash and debt before dividing by 57.5 million diluted shares. This process results in a fair value per share of $251.68. Against a current price of $408.54, the resulting margin of safety is -38.40%, representing the buffer between the estimate and the market price. The result is most sensitive to the 6.00% growth assumption, as even slight changes to this annual forecast compound materially over the ten-year period.
Overall Verdict
How the five signals above stack up together, then the full synthesis.
Earnings Yield
3.09% vs ~4-5% bond-yield benchmark
Return on Capital
Capital-free operations — negative invested capital, positive EBIT
Acquirer's Multiple
27.0x against a peer median of 49.6x (peers: 49.6x) — 45.7% below the median.
FS-Score
9/10 — Financial rockstar
Intrinsic Value
-38.4% margin of safety
The framework presents a distinct tension between the operational efficiency of the business and the current market valuation. The FS-Score of 9/10 and the Return on Capital—fueled by negative invested capital—demonstrate strong operational health. Conversely, the valuation indicators are mixed. While the Acquirer’s Multiple of 27.0x sits significantly below the peer median of 49.6x, representing 45.7% below the median, the company generates an Earnings Yield of 3.09%, which falls short of the 4-5% bond-yield benchmark. Furthermore, the Intrinsic Value check suggests a -38.4% margin of safety, indicating that the current price exceeds calculated fair value. This creates a dichotomy where high operational performance metrics contrast with valuation signals that highlight a premium price relative to earnings and intrinsic models. A change in the Earnings Yield would most significantly alter this picture, as it would directly shift the assessment of the company’s cash generation capability relative to the broader fixed-income environment.