DCF Studio

    FFIV · NMS · Technology

    F5, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 186.69

    Market price

    USD 324.55

    Implied upside

    -42.5%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-09-30

    AdjustedReported capital expenditure averages 1.41% of revenue against depreciation and amortisation of 3.77%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 3.77% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 186.69-42.5%
    Exit multiple
    USD 294.12-9.4%
    Market price
    USD 324.55

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m399m798mFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 3.7bnUSD 4.0bnUSD 4.2bnUSD 4.4bnUSD 4.7bnUSD 4.9bnUSD 5.1bnUSD 5.3bnUSD 5.4bnUSD 5.6bn+4.6%
    EBITUSD 775.6mUSD 828.0mUSD 879.5mUSD 929.6mUSD 977.6mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.2bn+4.6%
    NOPATUSD 640.2mUSD 683.5mUSD 726.0mUSD 767.4mUSD 807.0mUSD 844.3mUSD 878.9mUSD 910.2mUSD 937.8mUSD 961.3m+4.6%
    Add depreciation & amortisationUSD 139.8mUSD 149.2mUSD 158.5mUSD 167.5mUSD 176.2mUSD 184.3mUSD 191.9mUSD 198.7mUSD 204.7mUSD 209.9m+4.6%
    Less capital expenditureUSD -139.8mUSD -160.6mUSD -182.6mUSD -205.7mUSD -229.8mUSD -254.4mUSD -279.4mUSD -304.5mUSD -329.3mUSD -353.5m+10.9%
    Capex, % of revenue3.8%4.1%4.3%4.6%4.9%5.2%5.5%5.8%6.1%6.4%-
    Less increase in working capitalUSD -90.5mUSD -36.7mUSD -36.1mUSD -35.1mUSD -33.6mUSD -31.7mUSD -29.3mUSD -26.6mUSD -23.4mUSD -19.9m-15.5%
    Free cashflow to firmUSD 549.7mUSD 635.4mUSD 665.8mUSD 694.1mUSD 719.8mUSD 742.5mUSD 762.0mUSD 777.9mUSD 789.8mUSD 797.7m+4.2%
    Discount factor0.95640.87490.80040.73220.66980.61270.56050.51270.46900.4290-
    Present valueUSD 525.7mUSD 555.9mUSD 532.9mUSD 508.2mUSD 482.1mUSD 454.9mUSD 427.1mUSD 398.8mUSD 370.4mUSD 342.3m-
    Present Value Of The ForecastUSD 4.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.058Reported 1.086, pulled toward 1.0 (Blume)
    Cost of equity9.37%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 18.4bn98.6% of capital
    Total debtUSD 261.8m1.4% of capital, book value as a proxy
    Tax rate17.5%Effective, capped at statutory
    WACC9.32%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 186.69

    53% of EV

    Forecast FCFF, final year
    USD 797.7m
    Capex at depreciation, working capital in reinvestment
    USD 961.3m
    Less reinvestment at g/ROIC (14.9% of NOPAT)
    USD -143.7m
    Capitalised
    USD 817.6m
    ROIC (reported)
    16.7%
    Terminal value, undiscounted
    USD 12.3bn
    Terminal value, discounted
    USD 5.3bn
    Enterprise value
    USD 9.9bn
    Less net debt
    USD -1.1bn
    Equity value
    USD 11.0bn

    Exit at 19.6x EBITDA

    Value per shareUSD 294.12

    72% of EV

    Terminal value, undiscounted
    USD 27.0bn
    Terminal value, discounted
    USD 11.6bn
    Enterprise value
    USD 16.2bn
    Less net debt
    USD -1.1bn
    Equity value
    USD 17.3bn

    Spread between methods: 45%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.32%239.65246.69255.43266.46280.68
    8.32%206.76210.54215.15220.83227.92
    9.32%182.33184.29186.69189.63193.25
    10.32%163.49164.39165.52166.94168.71
    11.32%148.52148.77149.16149.70150.43

    Outlined: this model. Green text: above today's price of 324.55. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year4.6%6.1%13.9%
    EBIT margin25.6%20.9%37.6%
    Discount rate-9.3%6.2%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.