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Exploring the Growth Potential of NASDAQ:FTNT as It Nears a Breakout.

By Mill Chart

Last update: Nov 22, 2023

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether FORTINET INC (NASDAQ:FTNT) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but FORTINET INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

How We Gauge Growth for NASDAQ:FTNT

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:FTNT scores a 8 out of 10:

  • The Earnings Per Share has grown by an impressive 56.37% over the past year.
  • The Earnings Per Share has been growing by 41.93% on average over the past years. This is a very strong growth
  • FTNT shows a strong growth in Revenue. In the last year, the Revenue has grown by 26.22%.
  • The Revenue has been growing by 24.20% on average over the past years. This is a very strong growth!
  • Based on estimates for the next years, FTNT will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.13% on average per year.
  • FTNT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 18.69% yearly.

Health Examination for NASDAQ:FTNT

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:FTNT has earned a 8 out of 10:

  • An Altman-Z score of 4.50 indicates that FTNT is not in any danger for bankruptcy at the moment.
  • FTNT's Altman-Z score of 4.50 is fine compared to the rest of the industry. FTNT outperforms 71.58% of its industry peers.
  • FTNT has a debt to FCF ratio of 0.48. This is a very positive value and a sign of high solvency as it would only need 0.48 years to pay back of all of its debts.
  • The Debt to FCF ratio of FTNT (0.48) is better than 84.17% of its industry peers.
  • Even though the debt/equity ratio score it not favorable for FTNT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
  • FTNT does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Analyzing Profitability Metrics

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:FTNT was assigned a score of 9 for profitability:

  • Looking at the Return On Assets, with a value of 15.39%, FTNT belongs to the top of the industry, outperforming 96.04% of the companies in the same industry.
  • The Return On Equity of FTNT (1552.90%) is better than 100.00% of its industry peers.
  • FTNT's Return On Invested Capital of 24.93% is amongst the best of the industry. FTNT outperforms 98.20% of its industry peers.
  • FTNT had an Average Return On Invested Capital over the past 3 years of 18.64%. This is significantly above the industry average of 10.62%.
  • The 3 year average ROIC (18.64%) for FTNT is below the current ROIC(24.93%), indicating increased profibility in the last year.
  • FTNT has a better Profit Margin (22.25%) than 93.88% of its industry peers.
  • In the last couple of years the Profit Margin of FTNT has grown nicely.
  • FTNT has a Operating Margin of 23.37%. This is amongst the best in the industry. FTNT outperforms 93.53% of its industry peers.
  • FTNT's Operating Margin has improved in the last couple of years.
  • FTNT's Gross Margin of 76.44% is fine compared to the rest of the industry. FTNT outperforms 73.02% of its industry peers.

How do we evaluate the setup for NASDAQ:FTNT?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:FTNT scores a 8 out of 10:

FTNT has a bad technical rating, but it does show a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 52.59. Right above this resistance zone may be a good entry point. We notice that large players showed an interest for FTNT in the last couple of days, which is a good sign.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Our latest full fundamental report of FTNT contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of FTNT

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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FORTINET INC

NASDAQ:FTNT (2/22/2024, 7:00:00 PM)

After market: 66.9999 +0.04 (+0.06%)

66.96

+1.62 (+2.48%)

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