Is NASDAQ:FTNT on the Verge of a Major Breakout as a Strong Growth Stock?

In this article we will dive into FORTINET INC (NASDAQ:FTNT) as a possible candidate for growth investing. Investors should always do their own research, but we noticed FORTINET INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Growth Assessment of NASDAQ:FTNT

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:FTNT was assigned a score of 8 for growth:

• FTNT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 56.37%, which is quite impressive.
• The Earnings Per Share has been growing by 41.93% on average over the past years. This is a very strong growth
• FTNT shows a strong growth in Revenue. In the last year, the Revenue has grown by 26.22%.
• FTNT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 24.20% yearly.
• The Earnings Per Share is expected to grow by 16.28% on average over the next years. This is quite good.
• The Revenue is expected to grow by 17.51% on average over the next years. This is quite good.

Understanding NASDAQ:FTNT's Health Score

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:FTNT has earned a 8 out of 10:

• An Altman-Z score of 4.95 indicates that FTNT is not in any danger for bankruptcy at the moment.
• FTNT has a Altman-Z score of 4.95. This is in the better half of the industry: FTNT outperforms 69.06% of its industry peers.
• The Debt to FCF ratio of FTNT is 0.48, which is an excellent value as it means it would take FTNT, only 0.48 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 0.48, FTNT belongs to the top of the industry, outperforming 83.81% of the companies in the same industry.
• Even though the debt/equity ratio score it not favorable for FTNT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• 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.

What does the Profitability looks like for NASDAQ:FTNT

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:FTNT has achieved a 9:

• FTNT has a Return On Assets of 15.39%. This is amongst the best in the industry. FTNT outperforms 95.68% of its industry peers.
• With an excellent Return On Equity value of 1552.90%, FTNT belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
• FTNT has a better Return On Invested Capital (24.93%) than 98.56% of its industry peers.
• FTNT had an Average Return On Invested Capital over the past 3 years of 18.64%. This is significantly above the industry average of 10.09%.
• The 3 year average ROIC (18.64%) for FTNT is below the current ROIC(24.93%), indicating increased profibility in the last year.
• FTNT's Profit Margin of 22.25% is amongst the best of the industry. FTNT outperforms 93.17% of its industry peers.
• In the last couple of years the Profit Margin of FTNT has grown nicely.
• The Operating Margin of FTNT (23.37%) is better than 93.53% of its industry peers.
• FTNT's Operating Margin has improved in the last couple of years.
• With a decent Gross Margin value of 76.44%, FTNT is doing good in the industry, outperforming 71.94% of the companies in the same industry.

How do we evaluate the setup for NASDAQ:FTNT?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:FTNT currently has a 8 as setup rating:

FTNT has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 58.33, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of FTNT

Our latest full technical report of FTNT contains the most current technical analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.