Fact based stock research
F5 Networks (NasdaqGS:FFIV)
US3156161024
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
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F5 Networks stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), F5 Networks (Communications Equipment, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of F5 Networks are a good value (attractively priced) with a consolidated Value Rank of 61 (better than 61% of alternatives) but show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on F5 Networks's financial characteristics. As the company F5 Networks's key financial metrics exhibit good value (Obermatt Value Rank of 61) but low growth (Obermatt Growth Rank of 21) and risky financing practices (Obermatt Safety Rank of 31), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 61% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: F5 Networks
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 9 |
|
11 |
|
12 |
|
61 |
|
| GROWTH | ||||||||
| GROWTH | 24 |
|
57 |
|
53 |
|
21 |
|
| SAFETY | ||||||||
| SAFETY | 47 |
|
81 |
|
81 |
|
31 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
75 |
|
65 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
61 |
|
4 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), F5 Networks (Communications Equipment, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of F5 Networks are a good value (attractively priced) with a consolidated Value Rank of 61 (better than 61% of alternatives) but show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on F5 Networks's financial characteristics. As the company F5 Networks's key financial metrics exhibit good value (Obermatt Value Rank of 61) but low growth (Obermatt Growth Rank of 21) and risky financing practices (Obermatt Safety Rank of 31), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 61% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 9 |
|
11 |
|
12 |
|
61 |
|
| GROWTH | ||||||||
| GROWTH | 24 |
|
57 |
|
53 |
|
21 |
|
| SAFETY | ||||||||
| SAFETY | 47 |
|
81 |
|
81 |
|
31 |
|
| COMBINED | ||||||||
| COMBINED | 45 |
|
50 |
|
50 |
|
34 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 61 (better than 61% compared with alternatives), F5 Networks shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for F5 Networks. Price-to-Profit (also referred to as price-earnings, P/E) is 75 which means that the stock price compared with what market professionals expect for future profits is lower than for 75% of comparable companies, indicating a good value concerning F5 Networks's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 66, which means that the stock price is lower as regards to invested capital than for 66% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 53% of alternatives (only 47% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 61, is a buy recommendation based on F5 Networks's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 19 |
|
12 |
|
13 |
|
47 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 49 |
|
47 |
|
57 |
|
75 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 14 |
|
25 |
|
46 |
|
66 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 9 |
|
11 |
|
12 |
|
61 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), F5 Networks shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for F5 Networks. Sales Growth has a below market rank of 22, which means that, currently, professionals expect the company to grow less than 78% of its competitors. The same is valid for Capital Growth, with a rank of 25, and Profit Growth, with a rank of 22. Currently, professionals expect the company to grow its profits less than 78% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 69, which means that the stock returns have recently been above 69% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for F5 Networks, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 39 |
|
48 |
|
37 |
|
22 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 42 |
|
46 |
|
48 |
|
22 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
36 |
|
21 |
|
25 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 61 |
|
73 |
|
83 |
|
69 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 24 |
|
57 |
|
53 |
|
21 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company F5 Networks has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of F5 Networks is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for F5 Networks.Leverage is at 88, meaning the company has a below-average debt-to-equity ratio. It has less debt than 88% of its competitors.Refinancing is at a rank of 57, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Liquidity is at 1, meaning that the company generates less profit to service its debt than 99% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), F5 Networks has a financing structure that is riskier than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for F5 Networks more challenging. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 43 |
|
64 |
|
100 |
|
88 |
|
| REFINANCING | ||||||||
| REFINANCING | 10 |
|
17 |
|
29 |
|
57 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 71 |
|
95 |
|
95 |
|
1 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 47 |
|
81 |
|
81 |
|
31 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
30 |
|
1 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
45 |
|
50 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
79 |
|
94 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
90 |
|
87 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
75 |
|
65 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for F5 Networks from November 14, 2024.
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