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

Last update: Feb 28, 2024

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if FORTINET INC (NASDAQ:FTNT) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted FORTINET INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Growth Analysis for NASDAQ:FTNT

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:FTNT has received a 8 out of 10:

FTNT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.89%, which is quite impressive.
The Earnings Per Share has been growing by 35.13% 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 20.09%.
Measured over the past years, FTNT shows a quite strong growth in Revenue. The Revenue has been growing by 15.28% on average per year.
FTNT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.59% yearly.
The Revenue is expected to grow by 16.91% on average over the next years. This is quite good.

A Closer Look at Health for NASDAQ:FTNT

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:FTNT has received a 6 out of 10:

FTNT has an Altman-Z score of 5.22. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.22, FTNT is doing good in the industry, outperforming 69.45% of the companies in the same industry.
FTNT has a debt to FCF ratio of 0.57. This is a very positive value and a sign of high solvency as it would only need 0.57 years to pay back of all of its debts.
The Debt to FCF ratio of FTNT (0.57) is better than 82.55% of its industry peers.

Profitability Assessment of NASDAQ:FTNT

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:FTNT, the assigned 9 is noteworthy for profitability:

FTNT's Return On Assets of 15.81% is amongst the best of the industry. FTNT outperforms 96.00% of its industry peers.
FTNT has a better Return On Invested Capital (27.59%) than 98.55% of its industry peers.
FTNT had an Average Return On Invested Capital over the past 3 years of 21.99%. This is significantly above the industry average of 9.91%.
The 3 year average ROIC (21.99%) for FTNT is below the current ROIC(27.59%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 21.64%, FTNT belongs to the top of the industry, outperforming 92.73% of the companies in the same industry.
In the last couple of years the Profit Margin of FTNT has grown nicely.
Looking at the Operating Margin, with a value of 23.31%, FTNT belongs to the top of the industry, outperforming 93.45% of the companies in the same industry.
In the last couple of years the Operating Margin of FTNT has grown nicely.
FTNT has a better Gross Margin (76.68%) than 72.73% of its industry peers.
FTNT's Gross Margin has improved in the last couple of years.

How do we evaluate the setup for NASDAQ:FTNT?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:FTNT scores a 7 out of 10:

FTNT has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price. There is a support zone below the current price at 69.59, a Stop Loss order could be placed below this zone.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Check the latest full fundamental report of FTNT for a complete fundamental analysis.

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

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.