F5, Inc. (FFIV) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001048695

P/B 4.16

P/E 21.59

P/S 4.84

Market Cap 14.95 Bn

ROIC (Qtr) 18.03

Div Yield % 0.00

Rev 1y % (Qtr) 8.49

Total Debt (Qtr) 230.75 Mn

Debt/Equity (Qtr) 0.06

About

F5, Inc. (FFIV) is a renowned player in the application delivery and security industry, which is currently experiencing rapid growth due to the rising demand for cloud-based and hybrid IT environments. The company's primary business activities involve developing, marketing, and selling a range of products and services that enable customers to deliver, secure, and optimize their applications and APIs. F5's operations span various countries and regions, with a diverse customer base that includes large enterprise businesses, public sector institutions,...

F5, Inc. (FFIV) is a renowned player in the application delivery and security industry, which is currently experiencing rapid growth due to the rising demand for cloud-based and hybrid IT environments. The company's primary business activities involve developing, marketing, and selling a range of products and services that enable customers to deliver, secure, and optimize their applications and APIs. F5's operations span various countries and regions, with a diverse customer base that includes large enterprise businesses, public sector institutions, governments, and service providers.

F5 generates revenue through the sale of its products and services, which include packaged software, subscription-based offerings, and hardware. The company's primary offerings include BIG-IP, F5 NGINX, and F5 Distributed Cloud Services. BIG-IP is a family of products that provides feature-rich, highly programmable, and configurable application security and delivery solutions for legacy applications. F5 NGINX is a lightweight, developer-friendly solution that optimizes Kubernetes traffic management and load balances cloud-native and hybrid cloud applications. F5 Distributed Cloud Services is a comprehensive unified, security, networking, and application management service that enables customers to deploy, secure, and operate their applications wherever they may reside.

Within the industry, F5 holds a strong position due to its broad portfolio of products and services that cater to the needs of customers and partners. The company's competitive advantages include its ability to provide consistent, high-quality customer service and technical support, as well as its capacity to innovate and develop new products that meet the evolving needs of its customers. F5's competitors include companies such as Akamai, Cisco, Citrix Systems, Cloudflare, Fortinet, Imperva, Juniper Networks, Palo Alto, and Radware.

F5's customers include a wide variety of enterprises and service providers among Fortune 1000 and Business Week Global 1000 companies, spanning various sectors like technology, telecommunications, financial services, transportation, education, manufacturing, healthcare, and government. The company's sales teams sell its products and services directly to customers by working closely with its channel partners, including distributors, value-added resellers, managed service providers, and systems integrators.

The F5 NGINX family of products includes F5 NGINX Plus, F5 NGINX Management Suite, and F5 NGINX Ingress Controller. F5 NGINX Plus provides a comprehensive, high-performance load balancer, web server, content cache, and API gateway for modern applications. F5 NGINX Management Suite provides software tools that provide application and API management along with orchestration and analytics for F5 NGINX Plus instances running in private data centers and public clouds. F5 NGINX Ingress Controller provides traffic management for Kubernetes clusters.

F5 Distributed Cloud Services is a comprehensive unified, security, networking, and application management service that enables customers to deploy, secure, and operate their applications wherever they may reside. The F5 Distributed Cloud Services family of products includes F5 Distributed Cloud Web App and API Protection, F5 Distributed Cloud Multi-Cloud Networking, and F5 Distributed Cloud App Stack. F5 Distributed Cloud Web App and API Protection provides a comprehensive SaaS-based security solution that allows customers to accelerate time-to-service, lower total cost of ownership, and increase security efficacy on a cloud-native platform. F5 Distributed Cloud Multi-Cloud Networking simplifies networking with an integrated service stack that securely connects both networks and application workloads, lowering operational costs and increasing agility. F5 Distributed Cloud App Stack provides a SaaS-based solution that enables customers to deploy and orchestrate applications on a managed Kubernetes platform with centralized management of distributed applications.

Stock Price Chart

Analysis

Pros

Strong operating cash flow of 949.67M provides robust 4.12x coverage of total debt 230.75M, indicating excellent debt servicing capability and financial flexibility.
Strong tangible asset base of 3.88B provides 16.80x coverage of total debt 230.75M, indicating robust asset backing and low credit risk.
Robust free cash flow of 906.41M exceeds capital expenditure of 43.26M by 20.95x, indicating strong organic growth funding capability.
Retained earnings of 3.57B provide full 15.46x coverage of long-term debt 230.75M, indicating strong internal capital position.
Robust tangible asset base of 3.88B provides 4.28x coverage of working capital 906.12M, indicating strong operational backing.

Cons

Operating cash flow of 949.67M barely covers its investment activities of (219.49M), with a coverage ratio of -4.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (219.49M) provide weak support for R&D spending of 539.82M, which is -0.41x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Cash reserves of 1.34B provide limited coverage of acquisition spending of (171.06M), which is -7.86x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
High receivables of 414.43M relative to inventory of 77.23M (5.37 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
Operating cash flow of 949.67M provides insufficient coverage of deferred revenue obligations of 2B, which is 0.48x, raising concerns about future service delivery capabilities.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	2.18	2.56
EV to Cash from Ops.	14.48	38.32
EV to Debt	59.60	-11.37
EV to EBIT	17.01	-12.79
EV to EBITDA	15.46	7.72
EV to Free Cash Flow [EV/FCF]	15.17	24.22
EV to Market Cap	0.92	0.58
EV to Revenue	4.45	-35.00
Price to Book Value [P/B]	4.16	3.74
Price to Earnings [P/E]	21.59	-18.61

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	0.00	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-42.25	-404.11
Cash and Equivalents Growth (1y) %	25.09	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	22.16	31.15
EBITDA Growth (1y) %	11.42	49.02
EBIT Growth (1y) %	16.23	25.85
EBT Growth (1y) %	16.23	17.82
EPS Growth (1y) %	23.94	70.69
FCF Growth (1y) %	18.95	295.45
Gross Profit Growth (1y) %	11.32	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.49	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.83	1.21
Current Ratio	1.56	2.57
Debt to Equity Ratio	0.06	-0.93
Interest Cover Ratio	0.00	-13.15
Times Interest Earned	0.00	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	30.20	-544.82
EBIT Margin %	26.18	-197.78
EBT Margin %	26.18	-602.74
Gross Margin %	81.40	52.06
Net Profit Margin %	22.40	-605.52

F5, Inc. (NASDAQ: FFIV)