Quick Read
-
F5 beat revenue and EPS estimates for a ninth straight quarter of double-digit product growth, yet fell 20% after guiding fiscal 2027 revenue growth at just 8 to 9 percent.
-
Fortinet grew revenue 20% and billings 29% but still dropped ~26% in premarket, as its ~69x earnings multiple leaves no room for any slowdown.
-
At ~$365, F5 trades at about 20x guided 2027 EPS, which is a fair price for high-single-digit growth. This means the valuation cushion that attracted buyers is now gone.
-
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Fortinet didn't make the cut. Enter your email to see the names that beat FTNT. The report is free. Enter your email and see if any of your stocks made the cut.
F5( NASDAQ:FFIV ) reported fiscal fourth-quarter results after the close on October 27, 2026 and beat on both revenue and earnings. In the next session the stock fell 20%. Shares had gained 80% year to date heading into the report. Even after the drop, F5 is still up 43% for the year at $364.96 in October 29 premarket trading, with no bounce at all.
A day later, Fortinet( NASDAQ:FTNT ) beat, raised its outlook, and fell about 26% in premarket trading. Two beats followed by two steep drops tells you how much optimism was already in these prices.
What F5 Reported, and What It Promised
Revenue came in at $917.43 million, up 13%, against a $885.10 million consensus. Non-GAAP EPS of $4.42 exceeded the $4.26 estimate. It was F5's ninth consecutive quarter of double-digit product revenue growth.
The guidance was the problem. F5 guided first-quarter non-GAAP EPS to $4.25 to $4.37, and consensus is at $4.36, near the top of that range. For fiscal 2027, F5 guided revenue growth of 8% to 9% and EPS of $18.00 to $18.30.
Free Report, Just Released
Why Didn't FTNT Make The Top 10 List?
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now . Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
And FTNT didn't make the cut!
The report is free, and you can see why we think each stock is a top investment today.
Enter Your Email and See the Ten →
CFO Cooper Werner said on the call that gross margin will reflect "the higher component costs we have discussed previously" and that "the biggest driver on OpEx is investments that we are making to drive future growth." The board signed off on a new $1.5 billion buyback authorization. Keep in mind that an authorization gives F5 permission to buy back stock and does not require it. Doubling AI security specialist sellers in 2027 is a stated plan that has yet to be delivered.
Read-Through for Both Stocks
F5:The core issue is the hardware refresh cycle (customers replacing aging equipment). Werner said replacement revenue "is going to decline over the back half of the year." Direct AI bookings were well over $100 million, which is still small next to $3.42 billion in annual revenue.
Fortinet:Revenue rose 20% and billings climbed 29%. The stock still trades at about 69 times earnings, a multiple that only works if results keep getting better every quarter.
Hidden Price Hikes Behind the Growth
Part of the growth at both companies comes from higher prices. Fortinet's CEO Ken Xie said pricing had about a 10% impact on billings growth, and he called prices "stabilized, but not improved yet." F5 is stockpiling components ahead of a tight memory market. Reuters described the selloff as software stocks failing to meet lofty investor expectations. F5 did not put a dollar figure on AI security revenue for 2027, and it gave no number for product growth beyond calling it double-digit.
Cloudflare( NYSE:NET ) is my second-largest position, so I've followed application security stocks for years. In my experience, when the market punishes good results like this, it's usually reacting to the stock price rather than the business.
Was the F5 Selloff Overdone?
Mostly no. It was a fair repricing. At $364.96, F5 trades at about 20 times its guided fiscal 2027 EPS. That's a reasonable price for a company growing in the high single digits, and the cheap price was the part that went away. If you believe AI security will offset the fading refresh cycle, this level looks fair. If you think the refresh cycle was carrying the growth, there is less room to rebound.
Here is the test you can check: the fiscal first quarter, which ends December 31, 2026. If F5 reports non-GAAP EPS above $4.37 and keeps the 8% to 9% revenue outlook, the drop went too far. A result below $4.36 would show the market was right to sell on a lukewarm outlook after an 80% year.
Got $1,000? Before You Buy FTNT, Read This
If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. And FTNT wasn't one of them.
They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research points to as the 10 best stocks to buy right now, and it's free. Read more here and see which stocks made the list -->>
Contact editorial@247wallst.com for any questions or corrections.
