FFIV
F5, Inc.$271.36
Hold
Target $317.08
Report: Mar 07, 2026Technology • Software - Infrastructure • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$271.36+16.8%
Rec: HoldConviction: High
Entry Target
$243.91
(10% below current)
Fair Value
$317.08
(17% above current)
Stop Loss
$223.76
(18% below current)
Position Size
Half
Time Horizon
Strategic
Key Metrics
Live Snapshot
Market Data
52 Week High$346.00
52 Week Low$223.76
Avg. 3 Month Volume884K
Efficiency
LTM Gross Margin81.4%
LTM EBITDA Margin30.1%
LTM EBIT Margin26.2%
LTM Operating Margin24.7%
LTM ROA11.5%
LTM ROE20.3%
LTM ROIC73.2%
LTM ROCE18.2%
Capital Structure
Market Cap (MM)$16.4B
Enterprise Value (MM)$15.4B
Shares Outstanding57.65M
Total Debt (MM)$234.86M
Cash & Equivalents (MM)$1.20B
LTM Net Debt (MM)$-964.87M
LTM Net Debt/EBITDA-1.0x
Growth
TTM Rev. Growth8.8%
Last 3-Yr Rev. CAGR5.1%
Last 3-Yr EBITDA CAGR22.0%
Last 3-Yr EPS CAGR34.7%
Valuation
Street Target Price$330.67
LTM EV/Revenue4.9x
LTM EV/Gross Profit6.0x
LTM EV/EBIT18.7x
LTM EV/EBITDA16.2x
LTM P/E23.2x
LTM EV/FCF17.9x
LTM P/FCF19.0x
LTM P/TB4.2x
LTM P/B4.6x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $271.36 versus fair value $317.08 (16.8% expected return), and valuation confidence is stable. Debate: Bull case depends on Successful migration of the legacy BIG-IP installed base to the new ADSP platform. Bear case centers on Moat erosion due to the 2025 security breach. Conclusion: Recommendation is Hold with Half sizing and Strategic horizon.
Bull Case
Aggressive share cannibalization via a $1B buyback program and a 19.7% net yield over the last 4.8 years; 31% growth in systems revenue driven by a massive datacenter refresh cycle and AI infrastructure builds; high switching costs evidenced by an 81.4% gross margin.
Bear Case
Reputational damage and deal delays following the 2025 nation-state breach of BIG-IP source code; potential margin compression from memory cost inflation, with FY26 gross margin guidance lowered to 82.5-83.5%; ongoing securities litigation creating a persistent overhang on the valuation.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Successful migration of the legacy BIG-IP installed base to the new ADSP platform. This addresses market concerns about moat durability by d...
Long-Term (18+ months)Impact: Moderate
Resolution or settlement of the Smith v. F5 securities class action lawsuit. This would remove a significant sentiment overhang and allow th...
Long-Term (18+ months)Impact: Moderate
F5 is relevant for analysis at this moment due to the recent raise in FY26 guidance and the impending transition of the CEO to the Chairman...
Primary Risks
Concern: Medium
Moat erosion due to the 2025 security breach. The mechanism is a permanent loss of pricing power and customer trust, leading to churn toward...
Concern: Low
Margin compression from memory cost inflation. Rising input costs for hardware systems could erode the benefits of the software mix shift.
Concern: Medium
The governance outcome tree presents three paths: 1. Status Quo: The Locoh-Donou transition to Chair proceeds smoothly as the ADSP platform...
Recent Activity
2026-01-28SEC Filing (8-K)
+8.09%F5 reports Q1 FY26 revenue of $822M with 7% growth, driven by 11% product growth and 37% systems growth
2025-10-28SEC Filing (8-K)
-7.86%F5 Networks reports Q4 FY25 revenue of $810M, up 8% YoY, with strong systems growth
2025-10-16SEC Filing (8-K)
-10.70%F5, Inc. disclosed security incident involving nation-state threat actor.
2025-01-29SEC Filing (8-K)
+11.40%F5, Inc. reported record Q1 FY25 results with 11% revenue growth.
2024-10-29SEC Filing (8-K)
+10.06%F5 Networks reports Q4 FY24 revenue of $747M, up 6% YoY, with strong software growth
Valuation Table
9.8/10Decision Grade
Scenario Range
$179
Bear
$297
Bull
$271