FFIV
F5, Inc.
$466.65
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 43.0% above fair value
You pay
$466.65
Bear
$236.66
Fair
$326.31
Bull
$417.57
Bear
$236.66
-49.3%
7% stage 1 growth, 11% discount
Fair
$326.31
-30.1%
11% stage 1 growth, 11% discount
Bull
$417.57
-10.5%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.4%
11.0%
3.0%
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
34.8x
Market is pricing in (growth)
16.4%
vs 11.4% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (61 analysts)
$416.60
Divergence from AlphaVal
22%
Summary
Using a two-stage FCF DCF with 11% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $326.31 per share.
Warnings
Stock-based employee pay equals 33% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions