FORTINET INC (FTNT) Stock Fundamental Analysis
NASDAQ:FTNT - Nasdaq - US34959E1091 - Common Stock - Currency: USD
Overall FTNT gets a fundamental rating of 7 out of 10. We evaluated FTNT against 282 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 overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make FTNT suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year FTNT was profitable.
In the past year FTNT had a positive cash flow from operations.
In the past 5 years FTNT has always been profitable.
FTNT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
FTNT has a Return On Assets of 18.06%. This is amongst the best in the industry. FTNT outperforms 93.97% of its industry peers.
FTNT has a Return On Equity of 95.74%. This is amongst the best in the industry. FTNT outperforms 98.94% of its industry peers.
FTNT has a better Return On Invested Capital (30.04%) than 96.81% of its industry peers.
The Average Return On Invested Capital over the past 3 years for FTNT is significantly above the industry average of 12.17%.
The last Return On Invested Capital (30.04%) for FTNT is above the 3 year average (28.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.06% | ||
| ROE | 95.74% | ||
| ROIC | 30.04% |
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 94.68% of its industry peers.
FTNT's Profit Margin has improved in the last couple of years.
FTNT has a Operating Margin of 31.67%. This is amongst the best in the industry. FTNT outperforms 95.74% 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 81.65%, FTNT belongs to the top of the industry, outperforming 86.17% 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 | 31.67% | ||
| PM (TTM) | 30.6% | ||
| GM | 81.65% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so FTNT is creating value.
Compared to 1 year ago, FTNT has about the same amount of shares outstanding.
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 7.15 indicates that FTNT is not in any danger for bankruptcy at the moment.
The Altman-Z score of FTNT (7.15) is better than 76.24% of its industry peers.
FTNT has a debt to FCF ratio of 0.48. This is a very positive value and a sign of high solvency as it would only need 0.48 years to pay back of all of its debts.
FTNT has a Debt to FCF ratio of 0.48. This is in the better half of the industry: FTNT outperforms 78.37% of its industry peers.
FTNT has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.25, FTNT perfoms like the industry average, outperforming 42.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.48 | ||
| Altman-Z | 7.15 |
ROIC/WACC2.73
WACC11.01%
2.3 Liquidity
FTNT has a Current Ratio of 1.36. This is a normal value and indicates that FTNT is financially healthy and should not expect problems in meeting its short term obligations.
FTNT's Current ratio of 1.36 is in line compared to the rest of the industry. FTNT outperforms 43.62% of its industry peers.
FTNT has a Quick Ratio of 1.29. This is a normal value and indicates that FTNT is financially healthy and should not expect problems in meeting its short term obligations.
FTNT's Quick ratio of 1.29 is in line compared to the rest of the industry. FTNT outperforms 42.20% 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 | 1.36 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
FTNT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 45.66%, 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.
Looking at the last year, FTNT shows a quite strong growth in Revenue. The Revenue has grown by 13.83% in the last year.
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)45.66%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%34.88%
Revenue 1Y (TTM)13.83%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.77%
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 9.15% yearly.
Based on estimates for the next years, FTNT will show a quite strong growth in Revenue. The Revenue will grow by 13.49% on average per year.
EPS Next Y6.77%
EPS Next 2Y10.3%
EPS Next 3Y12.12%
EPS Next 5Y9.15%
Revenue Next Year14.71%
Revenue Next 2Y13.76%
Revenue Next 3Y13.71%
Revenue Next 5Y13.49%
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
The Price/Earnings ratio is 41.69, which means the current valuation is very expensive for FTNT.
Based on the Price/Earnings ratio, FTNT is valued a bit cheaper than the industry average as 64.18% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.69, FTNT is valued quite expensively.
With a Price/Forward Earnings ratio of 36.44, FTNT can be considered very expensive at the moment.
FTNT's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 37.36, FTNT is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.69 | ||
| Fwd PE | 36.44 |
4.2 Price Multiples
FTNT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 71.63% 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 68.44% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.89 | ||
| EV/EBITDA | 36.26 |
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.
FTNT's earnings are expected to grow with 12.12% in the coming years. This may justify a more expensive valuation.
PEG (NY)6.16
PEG (5Y)1.13
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 |
105.06
+0.25 (+0.24%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners70.95%
Inst Owner Change-0.39%
Ins Owners16.94%
Ins Owner Change0.44%
Market Cap80.42B
Analysts68.63
Price Target110.69 (5.36%)
Short Float %3.11%
Short Ratio4.05
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)13.09%
Min EPS beat(2)6.61%
Max EPS beat(2)19.58%
EPS beat(4)4
Avg EPS beat(4)20.63%
Min EPS beat(4)6.61%
Max EPS beat(4)36.59%
EPS beat(8)8
Avg EPS beat(8)15.88%
EPS beat(12)12
Avg EPS beat(12)15.02%
EPS beat(16)16
Avg EPS beat(16)13.18%
Revenue beat(2)1
Avg Revenue beat(2)0.05%
Min Revenue beat(2)-1.99%
Max Revenue beat(2)2.1%
Revenue beat(4)2
Avg Revenue beat(4)0.05%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)2.1%
Revenue beat(8)2
Avg Revenue beat(8)-0.99%
Revenue beat(12)4
Avg Revenue beat(12)-0.74%
Revenue beat(16)7
Avg Revenue beat(16)0.35%
PT rev (1m)-0.02%
PT rev (3m)-5.37%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)1.2%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.3%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.69 | ||
| Fwd PE | 36.44 | ||
| P/S | 13.09 | ||
| P/FCF | 38.89 | ||
| P/OCF | 35.1 | ||
| P/B | 40.97 | ||
| P/tB | 50.09 | ||
| EV/EBITDA | 36.26 |
EPS(TTM)2.52
EY2.4%
EPS(NY)2.88
Fwd EY2.74%
FCF(TTM)2.7
FCFY2.57%
OCF(TTM)2.99
OCFY2.85%
SpS8.02
BVpS2.56
TBVpS2.1
PEG (NY)6.16
PEG (5Y)1.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.06% | ||
| ROE | 95.74% | ||
| ROCE | 34.25% | ||
| ROIC | 30.04% | ||
| ROICexc | 189.85% | ||
| ROICexgc | 315.2% | ||
| OM | 31.67% | ||
| PM (TTM) | 30.6% | ||
| GM | 81.65% | ||
| FCFM | 33.66% |
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-Score7
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.48 | ||
| Debt/EBITDA | 0.24 | ||
| Cap/Depr | 171.92% | ||
| Cap/Sales | 3.64% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 110.4% | ||
| Profit Quality | 110.01% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.29 | ||
| Altman-Z | 7.15 |
F-Score7
WACC11.01%
ROIC/WACC2.73
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)45.66%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%34.88%
EPS Next Y6.77%
EPS Next 2Y10.3%
EPS Next 3Y12.12%
EPS Next 5Y9.15%
Revenue 1Y (TTM)13.83%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.77%
Revenue Next Year14.71%
Revenue Next 2Y13.76%
Revenue Next 3Y13.71%
Revenue Next 5Y13.49%
EBIT growth 1Y51.46%
EBIT growth 3Y41.66%
EBIT growth 5Y39.22%
EBIT Next Year18.29%
EBIT Next 3Y16.03%
EBIT Next 5Y16.33%
FCF growth 1Y13.41%
FCF growth 3Y16%
FCF growth 5Y21.29%
OCF growth 1Y13.87%
OCF growth 3Y14.62%
OCF growth 5Y22.82%