FORTINET INC (FTNT) Stock Fundamental Analysis
NASDAQ:FTNT - Nasdaq - US34959E1091 - Common Stock - Currency: USD
Taking everything into account, FTNT scores 7 out of 10 in our fundamental rating. FTNT was compared to 283 industry peers in the Software industry. FTNT scores excellent points on both the profitability and health parts. This is a solid base for a good stock. FTNT is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make FTNT suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
FTNT had positive earnings in the past year.
FTNT had a positive operating cash flow in the past year.
FTNT had positive earnings in each of the past 5 years.
FTNT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.23%, FTNT belongs to the top of the industry, outperforming 94.35% of the companies in the same industry.
With an excellent Return On Equity value of 94.14%, FTNT belongs to the best of the industry, outperforming 98.94% of the companies in the same industry.
FTNT has a Return On Invested Capital of 29.24%. This is amongst the best in the industry. FTNT outperforms 97.17% of its industry peers.
The Average Return On Invested Capital over the past 3 years for FTNT is significantly above the industry average of 12.14%.
The last Return On Invested Capital (29.24%) for FTNT is above the 3 year average (28.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.23% | ||
| ROE | 94.14% | ||
| ROIC | 29.24% |
ROA(3y)15.82%
ROA(5y)13.96%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)28.58%
ROIC(5y)24.19%
1.3 Margins
FTNT's Profit Margin of 30.60% is amongst the best of the industry. FTNT outperforms 92.23% of its industry peers.
FTNT's Profit Margin has improved in the last couple of years.
The Operating Margin of FTNT (30.85%) is better than 93.29% of its industry peers.
In the last couple of years the Operating Margin of FTNT has grown nicely.
Looking at the Gross Margin, with a value of 81.42%, FTNT belongs to the top of the industry, outperforming 84.81% of the companies in the same industry.
FTNT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.85% | ||
| PM (TTM) | 30.6% | ||
| GM | 81.42% |
OM growth 3Y16.85%
OM growth 5Y13.69%
PM growth 3Y17.3%
PM growth 5Y13.83%
GM growth 3Y1.97%
GM growth 5Y1.17%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), FTNT is creating value.
FTNT has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, FTNT has less shares outstanding
Compared to 1 year ago, FTNT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.56 indicates that FTNT is not in any danger for bankruptcy at the moment.
The Altman-Z score of FTNT (5.56) is better than 73.14% of its industry peers.
FTNT has a debt to FCF ratio of 0.49. This is a very positive value and a sign of high solvency as it would only need 0.49 years to pay back of all of its debts.
FTNT has a Debt to FCF ratio of 0.49. This is in the better half of the industry: FTNT outperforms 77.39% of its industry peers.
FTNT has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.24, FTNT perfoms like the industry average, outperforming 43.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 0.49 | ||
| Altman-Z | 5.56 |
ROIC/WACC2.56
WACC11.43%
2.3 Liquidity
A Current Ratio of 1.33 indicates that FTNT should not have too much problems paying its short term obligations.
The Current ratio of FTNT (1.33) is comparable to the rest of the industry.
FTNT has a Quick Ratio of 1.24. This is a normal value and indicates that FTNT is financially healthy and should not expect problems in meeting its short term obligations.
FTNT has a worse Quick ratio (1.24) than 60.07% of its industry peers.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 34.90% over the past year.
FTNT shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 36.84% yearly.
FTNT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.46%.
FTNT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.46% yearly.
EPS 1Y (TTM)34.9%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%12.28%
Revenue 1Y (TTM)14.46%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.64%
3.2 Future
Based on estimates for the next years, FTNT will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.15% on average per year.
The Revenue is expected to grow by 13.49% on average over the next years. This is quite good.
EPS Next Y6.77%
EPS Next 2Y10.3%
EPS Next 3Y12.12%
EPS Next 5Y9.15%
Revenue Next Year14.73%
Revenue Next 2Y13.77%
Revenue Next 3Y13.75%
Revenue Next 5Y13.49%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 29.83 indicates a quite expensive valuation of FTNT.
Compared to the rest of the industry, the Price/Earnings ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 66.08% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.93. FTNT is around the same levels.
Based on the Price/Forward Earnings ratio of 26.79, the valuation of FTNT can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 67.14% of the companies listed in the same industry.
FTNT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.31, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.83 | ||
| Fwd PE | 26.79 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 75.27% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 73.14% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.09 | ||
| EV/EBITDA | 25.96 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates FTNT does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of FTNT may justify a higher PE ratio.
FTNT's earnings are expected to grow with 12.12% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.4
PEG (5Y)0.81
EPS Next 2Y10.3%
EPS Next 3Y12.12%
5. Dividend
5.1 Amount
No dividends for FTNT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
77.25
-2.08 (-2.62%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners71.17%
Inst Owner Change0.22%
Ins Owners16.94%
Ins Owner Change-0.51%
Market Cap59.13B
Analysts68.63
Price Target111.44 (44.26%)
Short Float %2.92%
Short Ratio4.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.39%
Min EPS beat(2)6.18%
Max EPS beat(2)6.61%
EPS beat(4)4
Avg EPS beat(4)13.02%
Min EPS beat(4)6.18%
Max EPS beat(4)19.74%
EPS beat(8)8
Avg EPS beat(8)15.55%
EPS beat(12)12
Avg EPS beat(12)14.84%
EPS beat(16)16
Avg EPS beat(16)13.18%
Revenue beat(2)0
Avg Revenue beat(2)-1.81%
Min Revenue beat(2)-1.99%
Max Revenue beat(2)-1.63%
Revenue beat(4)1
Avg Revenue beat(4)-0.41%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)2.1%
Revenue beat(8)2
Avg Revenue beat(8)-0.84%
Revenue beat(12)4
Avg Revenue beat(12)-0.75%
Revenue beat(16)6
Avg Revenue beat(16)-0.1%
PT rev (1m)0.98%
PT rev (3m)-3.13%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.55%
EPS NY rev (1m)0%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-0.4%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.83 | ||
| Fwd PE | 26.79 | ||
| P/S | 9.33 | ||
| P/FCF | 29.09 | ||
| P/OCF | 24.63 | ||
| P/B | 28.7 | ||
| P/tB | 35.23 | ||
| EV/EBITDA | 25.96 |
EPS(TTM)2.59
EY3.35%
EPS(NY)2.88
Fwd EY3.73%
FCF(TTM)2.66
FCFY3.44%
OCF(TTM)3.14
OCFY4.06%
SpS8.28
BVpS2.69
TBVpS2.19
PEG (NY)4.4
PEG (5Y)0.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.23% | ||
| ROE | 94.14% | ||
| ROCE | 33.34% | ||
| ROIC | 29.24% | ||
| ROICexc | 131.78% | ||
| ROICexgc | 186.57% | ||
| OM | 30.85% | ||
| PM (TTM) | 30.6% | ||
| GM | 81.42% | ||
| FCFM | 32.07% |
ROA(3y)15.82%
ROA(5y)13.96%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)28.58%
ROIC(5y)24.19%
ROICexc(3y)95.75%
ROICexc(5y)91.08%
ROICexgc(3y)117.7%
ROICexgc(5y)117.86%
ROCE(3y)32.59%
ROCE(5y)27.58%
ROICexcg growth 3Y23.93%
ROICexcg growth 5Y1.09%
ROICexc growth 3Y22.17%
ROICexc growth 5Y2.73%
OM growth 3Y16.85%
OM growth 5Y13.69%
PM growth 3Y17.3%
PM growth 5Y13.83%
GM growth 3Y1.97%
GM growth 5Y1.17%
F-Score8
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 0.49 | ||
| Debt/EBITDA | 0.24 | ||
| Cap/Depr | 264.7% | ||
| Cap/Sales | 5.81% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 114.64% | ||
| Profit Quality | 104.8% | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.24 | ||
| Altman-Z | 5.56 |
F-Score8
WACC11.43%
ROIC/WACC2.56
Cap/Depr(3y)252.71%
Cap/Depr(5y)258.35%
Cap/Sales(3y)5.53%
Cap/Sales(5y)6.06%
Profit Quality(3y)142.53%
Profit Quality(5y)164.41%
High Growth Momentum
Growth
EPS 1Y (TTM)34.9%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%12.28%
EPS Next Y6.77%
EPS Next 2Y10.3%
EPS Next 3Y12.12%
EPS Next 5Y9.15%
Revenue 1Y (TTM)14.46%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.64%
Revenue Next Year14.73%
Revenue Next 2Y13.77%
Revenue Next 3Y13.75%
Revenue Next 5Y13.49%
EBIT growth 1Y34.55%
EBIT growth 3Y41.66%
EBIT growth 5Y39.22%
EBIT Next Year18.49%
EBIT Next 3Y16.12%
EBIT Next 5Y16.33%
FCF growth 1Y2.77%
FCF growth 3Y16%
FCF growth 5Y21.29%
OCF growth 1Y8.95%
OCF growth 3Y14.62%
OCF growth 5Y22.82%