Why Has F5 Networks Stock Underperformed The S&P Since 2019?

+22.10%
Upside
169
Market
206
Trefis
FFIV: F5 Networks logo
FFIV
F5 Networks

F5 Inc. (NASDAQ: FFIV) stock price rose just 17% from $139 in 2019 end to around $163 currently, primarily due to favorable changes in its sales. During this period, the company witnessed a stellar 43% jump in revenues, but its P/S multiple has dropped 22% over the same period. Additionally, over the same period, the S&P 500 returned a little over 20%, meaning that FFIV stock underperformed the broader markets since 2019.

In our interactive dashboard, Why F5 Networks Stock Moved: FFIV Stock Has Gained 17% Since 2019, we break down the factors behind this move.

(A) FFIV’s Total Revenue has grown 43% from $3.2 billion in FY 2019 to $4.6 billion on an LTM basis

  • FFIV’s total revenue increased from $3.2 billion in FY ’19 to $3.9 billion in FY ’21, and currently stands at around $4.6 billion on an LTM basis (FFIV’s fiscal year ends in September).
  • The sales growth has been consistent over these years and has been driven evenly by a growth in both, services and products revenues.
  • As of FY ’21, services sales make up around 52% of the company’s total sales, with products revenues making up the remaining 48%.
  • For additional details about FFIV’s revenues and comparison to peers, see F5 Networks (FFIV) Revenue Comparison
Relevant Articles
  1. Why Has F5 Networks Stock Risen Almost 1.5x Since 2019?
  2. Here’s What Makes ViaSat Inc. Stock A Smart Bet
  3. F5 Networks Stock Seems Poised To Build On Recent Gains
  4. Here’s Why Juniper Networks Stock Is Not Your Best Networking Bet
  5. After Rising 9% In A Week, Is F5 Networks Stock Still A Buy?
  6. F5 Networks Stock Could Jump 15% To Regain Early-2021 Highs

(B) Revenue per share (RPS) increased 42% from $53.73 in 2019 to $76.52 currently

  • FFIV’s revenue rose from $3.2 billion in 2019 to $4.6 billion currently, while the outstanding share count increased marginally over this period.
  • Due to this, RPS has risen from $53.73 in FY ’19 to $76.52 currently.

(C) Price-To-Sales (P/S) multiple for FFIV rose strongly from 2.7x in 2019 to 4x by 2021 end, but has pulled back to 2.1x currently, lower than its 2019 level

  • FFIV’s P/S multiple rose strongly to around 4x by late 2021, on the back of rising investor expectations surrounding increased networking products and services demand.
  • However, due to the current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back strongly, currently standing at around 2.1x.
  • For additional details about the company stock returns and comparison to peers, see F5 Networks (FFIV) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns May 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 FFIV Return 0% -31% 16%
 S&P 500 Return -3% -16% 79%
 Trefis Multi-Strategy Portfolio -5% -21% 215%

[1] Month-to-date and year-to-date as of 5/13/2022
[2] Cumulative total returns since the end of 2016

 

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates