As of May 22, 2025, F5 Networks Inc has a Discounted Cash Flow (DCF) derived fair value of $291.42 per share. With the current market price at $286.26, this represents a potential upside of 1.8%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $271.79 |
| DCF Fair Value (10-year) | $291.42 |
| Potential Upside (5-year) | -5.1% |
| Potential Upside (10-year) | 1.8% |
| Discount Rate (WACC) | 6.4% - 8.3% |
Revenue is projected to grow from $2816 million in 09-2024 to $4246 million by 09-2034, representing a compound annual growth rate of approximately 4.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 09-2024 | 2816 | 0% |
| 09-2025 | 3058 | 9% |
| 09-2026 | 3226 | 5% |
| 09-2027 | 3355 | 4% |
| 09-2028 | 3422 | 2% |
| 09-2029 | 3715 | 9% |
| 09-2030 | 3855 | 4% |
| 09-2031 | 3969 | 3% |
| 09-2032 | 4081 | 3% |
| 09-2033 | 4163 | 2% |
| 09-2034 | 4246 | 2% |
Net profit margin is expected to improve from 20% in 09-2024 to 22% by 09-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 09-2024 | 567 | 20% |
| 09-2025 | 625 | 20% |
| 09-2026 | 670 | 21% |
| 09-2027 | 707 | 21% |
| 09-2028 | 732 | 21% |
| 09-2029 | 805 | 22% |
| 09-2030 | 836 | 22% |
| 09-2031 | 860 | 22% |
| 09-2032 | 885 | 22% |
| 09-2033 | 902 | 22% |
| 09-2034 | 920 | 22% |
with a 5-year average of $42 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 09-2025 | 40 |
| 09-2026 | 44 |
| 09-2027 | 48 |
| 09-2028 | 48 |
| 09-2029 | 54 |
| 09-2030 | 56 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 106 |
| Days Inventory | 39 |
| Days Payables | 53 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 403 | 71 | 24 | 32 | 276 |
| 2026 | 866 | 152 | 51 | 53 | 609 |
| 2027 | 915 | 161 | 54 | 34 | 667 |
| 2028 | 945 | 166 | 55 | 19 | 706 |
| 2029 | 1042 | 183 | 59 | 84 | 715 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 271.79 | -5.1% |
| 10-Year DCF (Growth) | 291.42 | 1.8% |
| 5-Year DCF (EBITDA) | 271.06 | -5.3% |
| 10-Year DCF (EBITDA) | 284.36 | -0.7% |
Is F5 Networks Inc (FFIV) a buy or a sell? F5 Networks Inc is definitely a buy. Based on our DCF analysis, F5 Networks Inc (FFIV) appears to be slightly undervalued with upside potential of 1.8%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a hold with potential to accumulate at the current market price of $286.26.