Time To Buy F5 Stock?

F5 (NASDAQ:FFIV) recently unveiled new, comprehensive post-quantum cryptography (PQC) readiness solutions, seamlessly integrating them into its Application Delivery and Security Platform. These solutions are designed to help secure applications and APIs while maintaining high performance and scalability, a critical step given the transformative nature of post-quantum cryptography in data security. The overall demand for cybersecurity has risen lately, and F5 has benefited from the same. In fact, F5’s stock has seen a significant surge, climbing nearly 70% in the past twelve months. The crucial question for investors is whether, after such a substantial rally, it remains a worthwhile purchase. We believe it does. We see minimal cause for concern with FFIV stock, making it an attractive option given its current moderate valuation.

Our conclusion is based on a thorough comparison of FFIV stock’s current valuation against its recent operating performance and its present and historical financial condition. Our detailed analysis of F5 across key parameters—Growth, Profitability, Financial Stability, and Downturn Resilience—reveals a very strong operating performance and financial condition. However, for investors who seek lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative — having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Separately, see – QuantumScape: 40x Upside For QS Stock?

Image by Heinz Schmitz from Pixabay

How Does F5’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, FFIV stock looks slightly expensive compared to the broader market.

• F5 has a price-to-sales (P/S) ratio of 5.7 vs. a figure of 3.1 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 20.1 compared to 20.9 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 26.9 vs. the benchmark’s 26.9

How Have F5’s Revenues Grown Over Recent Years?

F5’s Revenues have grown marginally over recent years.

• F5 has seen its top line grow at an average rate of 3.5% over the last 3 years (vs. increase of 5.5% for S&P 500)
• Its revenues have grown 5.6% from $2.8 Bil to $2.9 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues grew 7.3% to $731 Mil in the most recent quarter from $681 Mil a year ago (vs. 4.8% improvement for S&P 500)

How Profitable Is F5?

F5’s profit margins are higher than most companies in the Trefis coverage universe.

• F5’s Operating Income over the last four quarters was $730 Mil, which represents a moderate Operating Margin of 24.8%
• F5’s Operating Cash Flow (OCF) over this period was $865 Mil, pointing to a high OCF Margin of 29.4% (vs. 14.9% for S&P 500)
• For the last four-quarter period, F5’s Net Income was $621 Mil – indicating a high Net Income Margin of 21.1% (vs. 11.6% for S&P 500)

Does F5 Look Financially Stable?

F5’s balance sheet looks very strong.

• F5’s Debt figure was $267 Mil at the end of the most recent quarter, while its market capitalization is $17 Bil (as of 6/26/2025). This implies a very strong Debt-to-Equity Ratio of 1.6% (vs. 19.4% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $1.3 Bil of the $5.9 Bil in Total Assets for F5.  This yields a strong Cash-to-Assets Ratio of 21.3%

How Resilient Is FFIV Stock During A Downturn?

FFIV stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• FFIV stock fell 47.4% from a high of $247.78 on 29 December 2021 to $130.29 on 25 April 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 25 November 2024
• Since then, the stock has increased to a high of $310.60 on 12 February 2025 and currently trades at around $290

COVID-19 Pandemic (2020)

• FFIV stock fell 35.7% from a high of $140.76 on 2 January 2020 to $90.55 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 28 April 2020

Global Financial Crisis (2008)

• FFIV stock fell 60.4% from a high of $45.60 on 27 July 2007 to $18.05 on 7 April 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 22 October 2009

Putting All The Pieces Together: What It Means For FFIV Stock

In summary, F5’s performance across the parameters detailed above are as follows:

• Growth: Neutral
• Profitability: Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Neutral
• Overall: Strong

F5 Networks has demonstrated strong performance across key financial and operational parameters. Despite this, the stock currently holds a moderate valuation, which we believe doesn’t fully reflect its underlying strength. This discrepancy is precisely why we consider FFIV stock an attractive buying opportunity.

Of course, no investment is without risk. Investors might hesitate to assign a higher valuation multiple to FFIV stock, particularly given its 6% revenue growth over the past twelve months. However, it’s crucial to note that revenue growth has shown recent improvement, alongside enhanced profitability. In our view, this positive trend warrants an upward adjustment in its valuation multiple.

While FFIV stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Invest with Trefis Market-Beating Portfolios

See all Trefis Price Estimates