Reasonable Price-to-Earnings Ratio
Strong Price-to-Sales Ratio
High Gross Profit Margin
Strong Return on Equity
Low Debt Levels
Healthy Liquidity Ratios
🏆 Strong Financial Performance
🔒 Comprehensive Security Solutions
🌐 Unique Hybrid Multi-Cloud Strategy
📈 Increased Revenue Expectations
🤖 AI Opportunities
High EV/EBITDA Ratio
Moderate Net Profit Margin
Interest Coverage Issue
⚠️ Uncertainty in Software Expansion Rates
F5 demonstrates strong financial health and competitive advantages in security and hybrid multi-cloud solutions. The company shows promising future prospects, particularly in AI, although there are some uncertainties regarding software expansion sustainability.
Analysis Date: January 28, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$392.79
Current Market Price: $236.57
IV/P Ratio: 1.66x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
40.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for FFIV
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (23.45)
P/B ratio ≤ 1.5 (4.31)
Current ratio ≥ 2.0 (1.48x)
Long-term debt < Net current assets (0.32x)
Margin of safety (40.0%)
FFIV does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
With a gross profit margin of 80.61%, FFIV demonstrates strong control over its production costs, allowing substantial profit on sales.
A return on equity of 19.33% indicates that FFIV is generating a good return for its shareholders, reflecting efficient management.
While the net profit margin of 20.58% is decent, it suggests there may be some areas for improvement in controlling expenses relative to revenue.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
19.33%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
2.82%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
80.61%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
20.58%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
With a debt-to-equity ratio of 0.075, FFIV demonstrates strong financial health with very low leverage, reducing financial risk.
The current ratio of 1.48 and quick ratio of 1.43 indicate that FFIV can easily cover its short-term liabilities, showcasing solid liquidity.
An interest coverage ratio of 0.0 indicates that the company may not be generating enough earnings to cover interest expenses, which is a significant concern.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.08x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
1.48x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
F5 delivered robust Q1 results with 11% total revenue growth and 20% product revenue growth. The company exceeded its earnings per share (EPS) guidance significantly, achieving a non-GAAP EPS of $3.84, which was $0.43 above the top end of their guidance range.
F5 has established itself as a leader in application and API security, allowing customers to consolidate multiple point solutions into a single platform. This differentiation has led to significant customer wins and expansions.
F5's unique position in the hybrid multi-cloud space sets it apart from competitors. The company has innovated across hardware and software, allowing it to provide solutions that address the complexity of hybrid environments.
F5 raised its FY '25 revenue growth expectations to 6-7%, up from an initial guidance of 4-5%. This reflects positive momentum and a strong pipeline heading into Q2.
F5 is positioning itself to capitalize on the growing AI market, with a focus on high-performance data delivery and security for AI workloads. The company has seen early traction in AI-related projects, signaling potential for future growth.
While the company is seeing strong expansion in software, there is caution about sustaining these rates throughout the year. The growth in Q1 was largely driven by large customer deals, and future performance may not maintain the same pace.