What happened?
Shares of application security provider F5 (NASDAQ:FFIV) fell 19.4% in the afternoon session after the company reported its fiscal fourth-quarter financial results and provided EPS guidance for the next quarter which fell below expectations.
According to a company press release, F5 reported revenue of $917.4 million and adjusted earnings per share of $4.42 for its fiscal fourth quarter. Revenue was up 13.3% year on year and was above analysts' expectations of $885.3 million, while adjusted earnings per share was above Wall Street estimates of $4.26.
The company projected fiscal 2027 adjusted earnings per share between $18.00 and $18.30. The midpoint of $18.15 was in line with analyst estimates. However, its EPS guidance for next quarter slightly missed. In addition, Operating margin was 23.1%, down from 25.4% in the same quarter last year. Free cash flow margin was 9.9%, down from 32.4% in the previous quarter, while billings reached $929.2 million, up 9% year on year. Full year 2027 sales outlook also implied a deceleration with projections for 8-9% year on year growth (vs 11% in FY '2026).
Following the results, Piper Sandler downgraded the stock to Neutral from Underweight, according to CNBC.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy F5? Access our full analysis report here, it’s free.
What is the market telling us
F5’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for F5 and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 7.3% on the news that the company reported strong first-quarter 2026 results that beat analyst expectations and raised its full-year earnings forecast. F5 announced that its first-quarter revenue grew 11% year-over-year to $811.7 million, surpassing Wall Street's estimates of $782.6 million. The company's adjusted earnings per share (EPS) of $3.90 also significantly exceeded the analyst consensus of $3.46. The positive results were supported by strong billings, which grew 22.7% year-over-year to $868.3 million, indicating healthy future revenue prospects.
Following the impressive quarter, F5 raised its full-year adjusted EPS guidance to a midpoint of $16.40, a 3.5% increase.
F5 is up 42.2% since the beginning of the year, but at $364.88 per share, it is still trading 24% below its 52-week high of $479.83 from October 2026. Investors who bought $1,000 worth of F5’s shares 5 years ago would now be looking at an investment worth $1,709.
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