Results: F5, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Last week saw the newest quarterly earnings release from F5, Inc. (NASDAQ:FFIV), an important milestone in the company's journey to build a stronger business. It looks like a credible result overall - although revenues of US$693m were in line with what the analysts predicted, F5 surprised by delivering a statutory profit of US$2.34 per share, a notable 11% above expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for F5

Following last week's earnings report, F5's 14 analysts are forecasting 2024 revenues to be US$2.79b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 7.8% to US$8.45. Before this earnings report, the analysts had been forecasting revenues of US$2.77b and earnings per share (EPS) of US$8.56 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 14% to US$191despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of F5's earnings by assigning a price premium. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic F5 analyst has a price target of US$220 per share, while the most pessimistic values it at US$160. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await F5 shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.9% by the end of 2024. This indicates a significant reduction from annual growth of 5.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - F5 is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that F5's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for F5 going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.