Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Charlie and I have spent the better part of a week with F5's books, its filings, and the shape of the business it sits inside. We will tell you what we see, in plain language, with no enthusiasm we cannot defend with arithmetic. F5 is a financially sturdy, well-managed, profitable, debt-free Seattle company that earns roughly $700 million in annual operating income on about $3.2 billion in revenue, throws off close to a billion dollars of free cash flow a year, and has been buying back a meaningful slice of its own stock. By the standards of the average S&P 500 listing, it looks fine. By our standards — which are unforgiving on the question of whether a moat is durable enough to compound owners' wealth over a quarter-century — it is an average business priced like one. You should not confuse the absence of obvious problems with the presence of a wonderful franchise.
Recent filings analysed: 10-Q (2026-08-06), 8-K (2026-07-27), 8-K (2026-06-23), 10-Q (2026-05-05).
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