If you’re trying to figure out whether now’s the moment to buy, hold, or sell F5 stock, you’re not alone. Over the last week, there’s been a sharp move down, as F5 closed out the past 7 days down 13.7%, adding to an 8.8% dip for the month. But step back, and things look much brighter: year-to-date the stock is up 17.3%, and over the past year, it’s gained 36.1%. If you extend that timeline even further, the three- and five-year returns reach an impressive 106.6% and 132.0% respectively. Clearly, this isn’t a company that just sits still.
So, what’s behind these swings? Investors have been grappling with market shifts that affect tech firms like F5, especially amid ongoing conversations about digital transformation and security in enterprise networks. The recent pullback might reflect some profit-taking after a big run or new uncertainties in the sector, but the long-term performance suggests renewed confidence could appear quickly once sentiment shifts. That brings us to the big question: is F5 still undervalued, or has the stock already gotten ahead of itself?
I’ve run F5 through six classic valuation checks, and it comes out with a score of 4, meaning it appears undervalued in the majority of the ways investors typically measure value. In the next section, I’ll break down these valuation methods and what the numbers say about F5 today. For those wanting a smarter, more holistic way to understand value, keep reading to the end for a fresh approach that goes beyond the usual models.
The Discounted Cash Flow (DCF) model calculates the value of a company by projecting its future cash flows and discounting them back to today’s dollars. This method helps estimate what F5 is really worth, beyond just its current market price.
Looking at F5, the model is based on the company’s Free Cash Flow (FCF), which for the last twelve months is $945.9 million. Analyst projections estimate steady growth, with FCF projected to increase to $1.01 billion by 2026 and around $1.19 billion by 2035. This progression uses both analyst estimates for the first five years and extended projections for the following years to capture the company’s longer-term earning power.
Using these forecasts, the DCF model arrives at an intrinsic fair value of $318.33 per share. At current market levels, this implies the stock is trading at a 7.2% discount to its estimated intrinsic value. This suggests F5 appears appropriately valued relative to the model, with only a modest gap between market and fair price.
Story Continues
Result: ABOUT RIGHT
FFIV Discounted Cash Flow as at Oct 2025
Simply Wall St performs a valuation analysis on every stock in the world every day (check out F5’s valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.
For companies like F5 that are firmly profitable, the Price-to-Earnings (PE) ratio is a go-to measure for investors. The PE ratio helps express how much investors are willing to pay today for a dollar of current earnings, making it a solid guide for valuing established, earnings-generating businesses.
The PE ratio investors are willing to pay often reflects growth expectations and risks. Fast-growing, stable companies can command higher PE ratios, while stagnating or riskier firms typically trade at lower multiples. With F5, the current PE ratio is 25x. That is below the Communications industry average of 31x, and it is far below the peer group average of 89x, suggesting F5 is more conservatively priced than typical competitors.
However, the proprietary “Fair Ratio” developed by Simply Wall St digs deeper, factoring in F5’s unique blend of earnings growth, profitability, risk, market cap, and industry context. With a calculated Fair Ratio of 29x, this metric goes further than simple peer or industry comparisons by directly capturing F5’s specific strengths and weaknesses. Since the stock trades just below its Fair Ratio—the difference is less than 0.10—F5 appears fairly valued on PE grounds, neither notably undervalued nor overpriced.
Result: ABOUT RIGHT
NasdaqGS:FFIV PE Ratio as at Oct 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives, a simple but powerful tool that connects your unique view of F5’s potential to the numbers, turning facts and forecasts into a personal investment story. With Narratives, you express why you believe the company is headed in a certain direction by linking your assumptions about future revenue, earnings, and margins directly to a fair value calculation. This aligns the story you see unfolding with the numbers that shape your decisions.
Available for everyone on Simply Wall St’s Community page, Narratives make it easy to build, share, and update your perspective as new information emerges, all in one place that’s trusted by millions of investors. Narratives also help you see how your fair value compares to the current market price, so you can decide if it’s time to buy, hold, or sell based on your own conviction, not just consensus. For example, some F5 investors currently see fair value as high as $390 per share, pointing to upside potential, while the most cautious see as little as $260, reflecting key risks. This shows how Narratives empower you to act on your view with clarity and confidence.
Do you think there’s more to the story for F5? Create your own Narrative to let the Community know!
NasdaqGS:FFIV Community Fair Values as at Oct 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include FFIV.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com