Using an unlevered Free Cash Flow to Firm (FCFF) model, we project F5, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.9% to 4.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 101, DPO 52, DIO 49). At a 9.3% WACC with mid-year discounting, the terminal value (69% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $136.26 per share, suggesting FFIV is overvalued by 53.9% at the current price of $295.75.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 581 | 600 | 610 | 602 | 628 | 644 |
| (−) Net Interest | 65 | 68 | 69 | 68 | 71 | 72 |
| (+) D&A | 38 | 41 | 44 | 42 | 45 | 47 |
| EBITDA | 685 | 709 | 722 | 712 | 744 | 763 |
| (−) Tax | 96 | 99 | 100 | 99 | 103 | — |
| (−) CapEx | 45 | 46 | 47 | 46 | 48 | — |
| (−) ΔWC | -6 | 29 | 15 | -12 | 41 | — |
| Free Cash Flow (FCF) | 551 | 535 | 560 | 578 | 552 | — |
| Peers' EBITDA Multiple | 10.0x | |||||
| Terminal Value | 7,641 | |||||
| WACC / Discount Rate | 9.27% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 527 | 468 | 448 | 424 | 370 | 4,905 |
| Enterprise Value | 7,143 | |||||
| Projection Period | 2,238 | 31.3% | ||||
| Terminal Value | 4,905 | 68.7% | ||||
| (−) Current Net Debt | (852) | |||||
| Equity Value | 7,995 | |||||
| (÷) Outstanding Shares | 59M | |||||
| Fair Price | $136 | -53.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.0x | 8.0x | 10.0x | 12.0x | 14.0x |
|---|---|---|---|---|---|
| 7.3% | $109 | $128 | $146 | $164 | $183 |
| 8.3% | $106 | $124 | $141 | $158 | $176 |
| 9.3% | $103 | $120 | $136 | $153 | $170 |
| 10.3% | $100 | $116 | $132 | $148 | $164 |
| 11.3% | $97 | $112 | $127 | $143 | $158 |
Current price: $295.75. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.