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Looking for growth without the hefty price tag? Consider NASDAQ:FTNT.

By Mill Chart

Last update: Dec 1, 2023

FORTINET INC (NASDAQ:FTNT) was identified as an affordable growth stock by our stock screener. NASDAQ:FTNT is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

How We Gauge Growth for NASDAQ:FTNT

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:FTNT boasts a 8 out of 10:

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

Assessing Valuation Metrics for NASDAQ:FTNT

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:FTNT, the assigned 5 reflects its valuation:

  • FTNT's Price/Earnings ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 75.36% of the companies in the same industry.
  • 73.21% of the companies in the same industry are more expensive than FTNT, based on the Price/Forward Earnings ratio.
  • FTNT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. FTNT is cheaper than 80.36% of the companies in the same industry.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of FTNT indicates a rather cheap valuation: FTNT is cheaper than 84.64% of the companies listed in the same industry.
  • FTNT has an outstanding profitability rating, which may justify a higher PE ratio.
  • A more expensive valuation may be justified as FTNT's earnings are expected to grow with 22.37% in the coming years.

Health Examination for NASDAQ:FTNT

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:FTNT has achieved a 8 out of 10:

  • FTNT has an Altman-Z score of 4.50. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
  • FTNT has a Altman-Z score of 4.50. This is in the better half of the industry: FTNT outperforms 70.00% of its industry peers.
  • The Debt to FCF ratio of FTNT is 0.48, which is an excellent value as it means it would take FTNT, only 0.48 years of fcf income to pay off all of its debts.
  • The Debt to FCF ratio of FTNT (0.48) is better than 84.64% of its industry peers.
  • Although FTNT does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
  • 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.

Profitability Analysis for NASDAQ:FTNT

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:FTNT has earned a 9 out of 10:

  • The Return On Assets of FTNT (15.39%) is better than 95.71% of its industry peers.
  • The Return On Equity of FTNT (1552.90%) is better than 100.00% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 24.93%, FTNT belongs to the top of the industry, outperforming 98.21% of the companies in the same industry.
  • The Average Return On Invested Capital over the past 3 years for FTNT is significantly above the industry average of 10.41%.
  • The last Return On Invested Capital (24.93%) for FTNT is above the 3 year average (18.64%), which is a sign of increasing profitability.
  • FTNT has a better Profit Margin (22.25%) than 93.21% of its industry peers.
  • In the last couple of years the Profit Margin of FTNT has grown nicely.
  • The Operating Margin of FTNT (23.37%) is better than 93.57% of its industry peers.
  • FTNT's Operating Margin has improved in the last couple of years.
  • Looking at the Gross Margin, with a value of 76.44%, FTNT is in the better half of the industry, outperforming 72.14% of the companies in the same industry.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Keep in mind

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 (2/21/2024, 7:00:01 PM)

After market: 66.35 +1.01 (+1.55%)

65.34

-2.57 (-3.78%)

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