In equity investing, mixing analytical methods can give a better structure for finding chances. One way is to look for stocks that show good fundamental growth traits while also having encouraging technical patterns. This tries to match the core business health, shown by rising earnings and sales, with a positive price momentum situation that points to institutional buying and a possible move from a period of sideways trading. The aim is to locate firms where better business basics might be starting to be seen by the wider market, as seen in the stock's price movement.
FORTINET INC (NASDAQ:FTNT) appears as a candidate from this kind of filtering. The cybersecurity firm, recognized for its combined Fortinet Security Fabric platform, works in an area with lasting demand drivers. The company's latest financial and technical information makes an argument for why it could suit this mixed growth-and-pattern plan.
Fundamental Growth Strength
The base of this plan is finding companies with clear and lasting growth. Fortinet's fundamental report shows a strong growth picture, which is key because previous and expected increases in earnings and sales are the force that usually pushes long-term stock gains.
- Notable Historical Growth: In recent years, Fortinet has displayed solid enlargement. Revenue has increased at an average yearly rate of 22.46%, while Earnings Per Share (EPS) has risen at a more notable 36.84% on average per year.
- Good Forward View: The growth story is likely to persist, though at a slower speed. Experts forecast average yearly revenue growth of 12.42% and EPS growth of 9.01% for the next years, numbers that stay much higher than the general market average.
- High Profitability: Growth is more worthwhile when it is very profitable. Fortinet gets a nearly ideal 9 out of 10 on the ChartMill Profitability Rating. Important measures like a Return on Invested Capital (ROIC) of 38.77% and a Profit Margin of 28.58% are some of the top in the software field, showing the company effectively turns revenue into earnings.
This good fundamental growth rating of 8/10 indicates the company has the business force that growth investors look for. You can see the full details of these measures in the detailed fundamental analysis report for FTNT.
Financial Health and Valuation Context
While growth is focused on, the plan also needs "acceptable profitability and health" to steer clear of companies growing in an unstable way. Fortinet's financial health rating of 7/10 is backed by a good solvency position, with a very small debt-to-free-cash-flow ratio of 0.49. Although liquidity ratios like the current and quick ratio are seen as lower areas, the report places this next to the company's high profitability and generally sound balance sheet.
On valuation, the view is varied but sensible for a growth stock. With a Price-to-Earnings (P/E) ratio near 30, FTNT trades similarly to the S&P 500 average. More significantly, its Price-to-Forward-Earnings and Enterprise Value/EBITDA ratios are lower than most of its software industry competitors. For growth investors, paying a market-average multiple for a company with better profitability and growth rates can be acceptable.
Technical Pattern and Breakout Chance
The "technical breakout pattern" part of the filter is made to find a positive risk/reward entry point. Fortinet's technical analysis report mentions an "acceptable pattern formation" with a pattern rating of 7/10, even with a lower total technical rating affected by its longer-term downward trend.
- Sideways Trading and Support: The report states prices have been in a period of sideways movement lately, with lower price swings. The stock is now trading above a set support area from $79.01 to $81.10, which is made by important moving averages and trendlines. This area could act as a sensible place for a stop-loss order if the expected breakout does not happen.
- Positive Short-Term Signs: The short-term trend has become positive, and a "Pocket Pivot" sign, a volume-based measure indicating accumulation, was noted recently. This matches with the stock doing better than 70% of its software industry peers over the past year, showing comparative strength.
- Resistance Points: For a breakout to get confirmation, the stock would need to pass nearby resistance, first around $82.18 from a daily trendline and then more importantly in the $86.92 to $87.52 area. A clear move above these points could signal the next upward phase.
This technical arrangement suggests the stock is forming a base after a large drop, possibly creating the conditions for a change in direction if the good fundamentals start to be shown in the price. The full technical view, including support and resistance areas, is in the FTNT technical analysis report.
Conclusion
Fortinet shows a situation where good fundamental growth measures meet a technical chart pattern indicating a possible turning point. The company's high profitability, historical growth performance, and fair valuation compared to its growth picture meet the fundamental needs for a growth stock. Technically, the recent sideways movement, clear support, and new positive signs like the Pocket Pivot create a pattern where the risk can be controlled against a defined breakout level.
This mix is exactly what the "Strong Growth Stocks with good Technical Pattern Ratings" filter tries to find: fundamentally healthy companies where price movement might be starting to agree with the core business strength. Investors using this mixed method often look for such matches to place their entries with gaining momentum.
If you want to look at other stocks that now fit this combined growth-and-pattern standard, you can use the same filter with this link: Find Strong Growth Stocks with Good Technical Patterns.
Disclaimer: This article is for information only and is not financial advice, a suggestion to buy or sell any security, or a support of any investment plan. Investing has risk, including the possible loss of principal. You should do your own study and talk with a qualified financial advisor before making any investment choices.
