NASDAQ:FTNT is showing good growth, while it is not too expensive.

Last update: Jan 30, 2025

Uncover the potential of FORTINET INC (NASDAQ:FTNT), a growth stock that our stock screener found to be reasonably priced. NASDAQ:FTNT is excelling in growth aspects, maintaining a healthy financial position, and still offers an attractive valuation. We'll examine each aspect in detail.

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 36.31%, 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 35.13% on average per year.
The Revenue has grown by 10.40% in the past year. This is quite good.
Measured over the past years, FTNT shows a very strong growth in Revenue. The Revenue has been growing by 24.11% on average per year.
The Earnings Per Share is expected to grow by 16.86% on average over the next years. This is quite good.
Based on estimates for the next years, FTNT will show a quite strong growth in Revenue. The Revenue will grow by 13.94% on average per year.

Valuation Examination for NASDAQ:FTNT

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:FTNT, the assigned 5 reflects its valuation:

FTNT's Price/Earnings ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 62.72% of the companies in the same industry.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 62.37% of the companies listed in the same industry.
FTNT is valuated cheaply when we compare the Price/Forward Earnings ratio to 91.29, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, FTNT is valued a bit cheaper than 70.61% 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 68.46% of the companies are valued more expensively.
The excellent profitability rating of FTNT may justify a higher PE ratio.
A more expensive valuation may be justified as FTNT's earnings are expected to grow with 19.79% in the coming years.

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 6 out of 10:

FTNT has an Altman-Z score of 7.08. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.08, FTNT is in the better half of the industry, outperforming 72.40% of the companies in the same industry.
FTNT has a debt to FCF ratio of 0.60. This is a very positive value and a sign of high solvency as it would only need 0.60 years to pay back of all of its debts.
The Debt to FCF ratio of FTNT (0.60) is better than 75.63% 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.

Profitability Analysis 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's Return On Assets of 17.28% is amongst the best of the industry. FTNT outperforms 93.19% of its industry peers.
FTNT's Return On Equity of 168.47% is amongst the best of the industry. FTNT outperforms 99.64% of its industry peers.
With an excellent Return On Invested Capital value of 25.60%, FTNT belongs to the best of the industry, outperforming 96.06% 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 12.10%.
The 3 year average ROIC (21.99%) for FTNT is below the current ROIC(25.60%), indicating increased profibility in the last year.
FTNT has a Profit Margin of 26.79%. This is amongst the best in the industry. FTNT outperforms 92.11% of its industry peers.
FTNT's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 28.19%, FTNT belongs to the top of the industry, outperforming 94.27% of the companies in the same industry.
In the last couple of years the Operating Margin of FTNT has grown nicely.
With a decent Gross Margin value of 79.71%, FTNT is doing good in the industry, outperforming 77.78% of the companies in the same industry.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Disclaimer

This article should in no way be interpreted as advice. 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.