NASDAQ:FTNT, a growth stock which is not overvalued.

FORTINET INC (NASDAQ:FTNT) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:FTNT is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Growth Analysis for NASDAQ:FTNT

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:FTNT has achieved a 8 out of 10:

• 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.
• Measured over the past years, FTNT shows a very strong growth in Earnings Per Share. The EPS has been growing by 41.93% on average per year.
• Looking at the last year, FTNT shows a very strong growth in Revenue. 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.
• Based on estimates for the next years, FTNT will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.28% on average per year.
• Based on estimates for the next years, FTNT will show a quite strong growth in Revenue. The Revenue will grow by 18.04% on average per year.

How We Gauge Valuation for NASDAQ:FTNT

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:FTNT has earned a 5 for valuation:

• 69.31% of the companies in the same industry are more expensive than FTNT, based on the Price/Earnings ratio.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 66.06% of the companies listed in the same industry.
• Based on the Enterprise Value to EBITDA ratio, FTNT is valued a bit cheaper than the industry average as 77.98% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, FTNT is valued cheaply inside the industry as 84.12% of the companies are valued more expensively.
• The excellent profitability rating of FTNT may justify a higher PE ratio.
• FTNT's earnings are expected to grow with 18.46% in the coming years. This may justify a more expensive valuation.

Evaluating Health: NASDAQ:FTNT

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:FTNT scores a 7 out of 10:

• FTNT has an Altman-Z score of 5.36. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
• FTNT's Altman-Z score of 5.36 is fine compared to the rest of the industry. FTNT outperforms 70.04% 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.
• FTNT has a better Debt to FCF ratio (0.48) than 84.12% of its industry peers.
• 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.
• 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.

Evaluating Profitability: NASDAQ:FTNT

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:FTNT scores a 9 out of 10:

• Looking at the Return On Assets, with a value of 15.39%, FTNT belongs to the top of the industry, outperforming 95.31% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 1552.90%, FTNT belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
• FTNT's Return On Invested Capital of 24.93% is amongst the best of the industry. FTNT outperforms 98.56% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for FTNT is significantly above the industry average of 9.95%.
• The 3 year average ROIC (18.64%) for FTNT is below the current ROIC(24.93%), indicating increased profibility in the last year.
• Looking at the Profit Margin, with a value of 22.25%, FTNT belongs to the top of the industry, outperforming 92.78% of the companies in the same industry.
• FTNT's Profit Margin has improved in the last couple of years.
• FTNT has a better Operating Margin (23.37%) than 93.50% of its industry peers.
• FTNT's Operating Margin has improved in the last couple of years.
• FTNT's Gross Margin of 76.44% is fine compared to the rest of the industry. FTNT outperforms 72.20% of its industry peers.

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

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.