FFIV
F5, Inc.
$393.63
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 57.3% above fair value
You pay
$393.63
Bear
$233.31
Fair
$250.19
Bull
$271.60
Bear
$233.31
-40.7%
3% stage 1 growth, 11% discount
Fair
$250.19
-36.4%
4% stage 1 growth, 11% discount
Bull
$271.60
-31.0%
5% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (4% base case)
Terminal Value % of EV
34%
Implied Market Multiple
29.1x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $351.75 from 61 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $250.19 per share.
Warnings
Stock-based employee pay equals 33% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $351.75 (from 61 analysts). Our estimate is 44% below the consensus -- consider that gap carefully.
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