FFIV
F5, Inc.
$430.39
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 21.5% above fair value
You pay
$430.39
Bear
$256.80
Fair
$354.09
Bull
$453.11
Bear
$256.80
-40.3%
7% stage 1 growth, 11% discount
Fair
$354.09
-17.7%
11% stage 1 growth, 11% discount
Bull
$453.11
+5.3%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
32.0x
Market is pricing in (growth)
15.2%
vs 11.4% base
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 $405.67 from 61 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $354.09 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