FORTINET INC (FTNT) Stock Fundamental Analysis
NASDAQ:FTNT - US34959E1091 - Common Stock
76.58 USD
-0.34 (-0.45%)
76.64 USD
+0.06 (+0.08%)
We assign a fundamental rating of 7 out of 10 to FTNT. FTNT was compared to 280 industry peers in the Software industry. Both the health and profitability get an excellent rating, making FTNT a very profitable company, without any liquidiy or solvency issues. FTNT is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes FTNT very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
FTNT had positive earnings in the past year.
In the past year FTNT had a positive cash flow from operations.
Each year in the past 5 years FTNT has been profitable.
In the past 5 years FTNT always reported a positive cash flow from operatings.
1.2 Ratios
FTNT has a better Return On Assets (18.23%) than 93.57% of its industry peers.
Looking at the Return On Equity, with a value of 94.14%, FTNT belongs to the top of the industry, outperforming 98.93% of the companies in the same industry.
With an excellent Return On Invested Capital value of 29.24%, FTNT belongs to the best of the industry, outperforming 96.79% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for FTNT is significantly above the industry average of 12.00%.
The 3 year average ROIC (28.58%) for FTNT is below the current ROIC(29.24%), indicating increased profibility in the last year.
| 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 91.07% of its industry peers.
In the last couple of years the Profit Margin of FTNT has grown nicely.
The Operating Margin of FTNT (30.85%) is better than 93.21% of its industry peers.
In the last couple of years the Operating Margin of FTNT has grown nicely.
The Gross Margin of FTNT (81.42%) is better than 86.07% of its industry peers.
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
FTNT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
FTNT has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for FTNT has been reduced compared to 5 years ago.
Compared to 1 year ago, FTNT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.53 indicates that FTNT is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.53, FTNT is in the better half of the industry, outperforming 73.21% of the companies in the same industry.
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.
The Debt to FCF ratio of FTNT (0.49) is better than 77.86% 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.
The Debt to Equity ratio of FTNT (0.24) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 0.49 | ||
| Altman-Z | 5.53 |
ROIC/WACC2.6
WACC11.26%
2.3 Liquidity
FTNT has a Current Ratio of 1.33. This is a normal value and indicates that FTNT is financially healthy and should not expect problems in meeting 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.
With a Quick ratio value of 1.24, FTNT perfoms like the industry average, outperforming 41.79% of the companies in the same industry.
The current and quick ratio evaluation for FTNT is rather negative, while it does have 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
FTNT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 34.90%, which is quite impressive.
Measured over the past years, FTNT shows a very strong growth in Earnings Per Share. The EPS has been growing by 36.84% on average per year.
The Revenue has grown by 14.46% in the past year. This is quite good.
Measured over the past years, FTNT shows a very strong growth in Revenue. The Revenue has been growing by 22.46% on average per year.
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
FTNT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.97% yearly.
Based on estimates for the next years, FTNT will show a quite strong growth in Revenue. The Revenue will grow by 13.02% on average per year.
EPS Next Y8.45%
EPS Next 2Y9.62%
EPS Next 3Y10.32%
EPS Next 5Y8.97%
Revenue Next Year14.58%
Revenue Next 2Y13.12%
Revenue Next 3Y12.3%
Revenue Next 5Y13.02%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 29.57 indicates a quite expensive valuation of FTNT.
FTNT's Price/Earnings ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 65.36% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.84. FTNT is around the same levels.
With a Price/Forward Earnings ratio of 26.89, FTNT can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 66.43% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.48. FTNT is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.57 | ||
| Fwd PE | 26.89 |
4.2 Price Multiples
75.71% of the companies in the same industry are more expensive than FTNT, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, FTNT is valued a bit cheaper than the industry average as 73.21% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.87 | ||
| EV/EBITDA | 25.75 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of FTNT may justify a higher PE ratio.
PEG (NY)3.5
PEG (5Y)0.8
EPS Next 2Y9.62%
EPS Next 3Y10.32%
5. Dividend
5.1 Amount
No dividends for FTNT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
76.58
-0.34 (-0.45%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners71.17%
Inst Owner Change-2.51%
Ins Owners16.94%
Ins Owner Change-1.34%
Market Cap58.68B
Analysts68.63
Price Target92.35 (20.59%)
Short Float %2.84%
Short Ratio2.55
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)-16.57%
PT rev (3m)-19.72%
EPS NQ rev (1m)2.74%
EPS NQ rev (3m)0.12%
EPS NY rev (1m)1.57%
EPS NY rev (3m)1.88%
Revenue NQ rev (1m)-0.57%
Revenue NQ rev (3m)-0.97%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.57 | ||
| Fwd PE | 26.89 | ||
| P/S | 9.26 | ||
| P/FCF | 28.87 | ||
| P/OCF | 24.44 | ||
| P/B | 28.48 | ||
| P/tB | 34.97 | ||
| EV/EBITDA | 25.75 |
EPS(TTM)2.59
EY3.38%
EPS(NY)2.85
Fwd EY3.72%
FCF(TTM)2.65
FCFY3.46%
OCF(TTM)3.13
OCFY4.09%
SpS8.27
BVpS2.69
TBVpS2.19
PEG (NY)3.5
PEG (5Y)0.8
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 | 5.53 |
F-Score8
WACC11.26%
ROIC/WACC2.6
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 Y8.45%
EPS Next 2Y9.62%
EPS Next 3Y10.32%
EPS Next 5Y8.97%
Revenue 1Y (TTM)14.46%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.64%
Revenue Next Year14.58%
Revenue Next 2Y13.12%
Revenue Next 3Y12.3%
Revenue Next 5Y13.02%
EBIT growth 1Y34.55%
EBIT growth 3Y41.66%
EBIT growth 5Y39.22%
EBIT Next Year18.49%
EBIT Next 3Y16.12%
EBIT Next 5Y17.24%
FCF growth 1Y2.77%
FCF growth 3Y16%
FCF growth 5Y21.29%
OCF growth 1Y8.95%
OCF growth 3Y14.62%
OCF growth 5Y22.82%