Results: F5, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

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$731m were in line with what the analysts predicted, F5 surprised by delivering a statutory profit of US$2.48 per share, a notable 14% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the consensus forecast from F5's 13 analysts is for revenues of US$3.02b in 2025. This reflects a credible 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 2.4% to US$10.47 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.01b and earnings per share (EPS) of US$10.30 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

Check out our latest analysis for F5

The analysts reconfirmed their price target of US$290, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on F5, with the most bullish analyst valuing it at US$320 and the most bearish at US$260 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the F5's past performance and to peers in the same industry. It's clear from the latest estimates that F5's rate of growth is expected to accelerate meaningfully, with the forecast 5.7% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.5% per year. So it's clear that despite the acceleration in growth, F5 is expected to grow meaningfully slower than the industry average.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$290, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple F5 analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for F5 that you should be aware of.

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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.