FORTINET INC (FTNT) Stock Fundamental Analysis
USA - NASDAQ:FTNT - US34959E1091 - Common Stock
84.66 USD
-0.12 (-0.14%)
84 USD
-0.66 (-0.78%)
We assign a fundamental rating of 7 out of 10 to FTNT. FTNT was compared to 285 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! These ratings could make FTNT a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
In the past year FTNT was profitable.
FTNT had a positive operating cash flow in the past year.
FTNT had positive earnings in each of the past 5 years.
Each year in the past 5 years FTNT had a positive operating cash flow.
1.2 Ratios
FTNT has a better Return On Assets (18.23%) than 93.33% of its industry peers.
The Return On Equity of FTNT (94.14%) is better than 98.95% of its industry peers.
Looking at the Return On Invested Capital, with a value of 29.24%, FTNT belongs to the top of the industry, outperforming 96.84% 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 11.90%.
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 has a Profit Margin of 30.60%. This is amongst the best in the industry. FTNT outperforms 91.23% of its industry peers.
In the last couple of years the Profit Margin of FTNT has grown nicely.
FTNT has a Operating Margin of 30.85%. This is amongst the best in the industry. FTNT outperforms 93.33% 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 86.32% 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.
The number of shares outstanding for FTNT remains at a similar level compared to 1 year ago.
The number of shares outstanding for FTNT has been reduced compared to 5 years ago.
FTNT has a better debt/assets ratio than last year.
2.2 Solvency
FTNT has an Altman-Z score of 5.97. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
FTNT's Altman-Z score of 5.97 is fine compared to the rest of the industry. FTNT outperforms 72.63% 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.
Looking at the Debt to FCF ratio, with a value of 0.49, FTNT is in the better half of the industry, outperforming 78.95% of the companies in the same industry.
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 44.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 0.49 | ||
| Altman-Z | 5.97 |
ROIC/WACC2.66
WACC10.99%
2.3 Liquidity
A Current Ratio of 1.33 indicates that FTNT should not have too much problems paying its short term obligations.
FTNT has a Current ratio (1.33) which 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 60.00% of its industry peers.
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.
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%.
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
Based on estimates for the next years, FTNT will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.97% on average per year.
The Revenue is expected to grow by 13.02% on average over the next years. This is quite good.
EPS Next Y8.43%
EPS Next 2Y9.59%
EPS Next 3Y10.3%
EPS Next 5Y8.97%
Revenue Next Year14.59%
Revenue Next 2Y13.11%
Revenue Next 3Y12.31%
Revenue Next 5Y13.02%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
Based on the Price/Earnings ratio of 32.69, the valuation of FTNT can be described as expensive.
Based on the Price/Earnings ratio, FTNT is valued a bit cheaper than the industry average as 65.61% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.57, FTNT is valued at the same level.
The Price/Forward Earnings ratio is 29.74, which means the current valuation is very expensive for FTNT.
FTNT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 63.86% of the companies in the same industry.
FTNT is valuated rather expensively when we compare the Price/Forward Earnings ratio to 23.09, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.69 | ||
| Fwd PE | 29.74 |
4.2 Price Multiples
FTNT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 75.44% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, FTNT is valued a bit cheaper than the industry average as 71.23% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.91 | ||
| EV/EBITDA | 28.75 |
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)3.88
PEG (5Y)0.89
EPS Next 2Y9.59%
EPS Next 3Y10.3%
5. Dividend
5.1 Amount
No dividends for FTNT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
84.66
-0.12 (-0.14%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners71.66%
Inst Owner Change-0.05%
Ins Owners16.86%
Ins Owner Change-0.78%
Market Cap64.87B
Revenue(TTM)6.34B
Net Income(TTM)1.94B
Analysts68.24
Price Target91.35 (7.9%)
Short Float %3.05%
Short Ratio2.44
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%
PT rev (3m)-17.22%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)2.83%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)1.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.52%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.69 | ||
| Fwd PE | 29.74 | ||
| P/S | 10.24 | ||
| P/FCF | 31.91 | ||
| P/OCF | 27.02 | ||
| P/B | 31.49 | ||
| P/tB | 38.66 | ||
| EV/EBITDA | 28.75 |
EPS(TTM)2.59
EY3.06%
EPS(NY)2.85
Fwd EY3.36%
FCF(TTM)2.65
FCFY3.13%
OCF(TTM)3.13
OCFY3.7%
SpS8.27
BVpS2.69
TBVpS2.19
PEG (NY)3.88
PEG (5Y)0.89
Graham Number12.52
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%
ROICexgc growth 3Y23.93%
ROICexgc 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 | 5.97 |
F-Score8
WACC10.99%
ROIC/WACC2.66
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 Y8.43%
EPS Next 2Y9.59%
EPS Next 3Y10.3%
EPS Next 5Y8.97%
Revenue 1Y (TTM)14.46%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.64%
Revenue Next Year14.59%
Revenue Next 2Y13.11%
Revenue Next 3Y12.31%
Revenue Next 5Y13.02%
EBIT growth 1Y34.55%
EBIT growth 3Y41.66%
EBIT growth 5Y39.22%
EBIT Next Year19.33%
EBIT Next 3Y14.96%
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%