FORTINET INC (FTNT) Stock Fundamental Analysis
NASDAQ:FTNT - Nasdaq - US34959E1091 - Common Stock - Currency: USD
FTNT gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals 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 priced too expensively while it is growing strongly. Keep and eye on this one! These ratings could make FTNT a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
FTNT had positive earnings in the past year.
FTNT had a positive operating cash flow in the past year.
FTNT had positive earnings in each of the past 5 years.
Each year in the past 5 years FTNT had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 18.06%, FTNT belongs to the best of the industry, outperforming 93.99% of the companies in the same industry.
FTNT has a better Return On Equity (95.74%) than 98.94% of its industry peers.
The Return On Invested Capital of FTNT (30.04%) is better than 96.82% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for FTNT is significantly above the industry average of 12.26%.
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
The Profit Margin of FTNT (30.60%) is better than 94.70% 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 95.76% of its industry peers.
In the last couple of years the Operating Margin of FTNT has grown nicely.
FTNT's Gross Margin of 81.65% is amongst the best of the industry. FTNT outperforms 86.22% of its industry peers.
In the last couple of years the Gross Margin of FTNT has remained more or less at the same level.
| 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
The debt/assets ratio for FTNT has been reduced compared to a year ago.
2.2 Solvency
FTNT has an Altman-Z score of 7.19. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
FTNT has a Altman-Z score of 7.19. This is in the better half of the industry: FTNT outperforms 76.68% 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 Debt to FCF ratio of 0.48. This is in the better half of the industry: FTNT outperforms 78.45% of its industry peers.
A Debt/Equity ratio of 0.25 indicates that FTNT is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.25, FTNT perfoms like the industry average, outperforming 42.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.48 | ||
| Altman-Z | 7.19 |
ROIC/WACC2.74
WACC10.96%
2.3 Liquidity
A Current Ratio of 1.36 indicates that FTNT should not have too much problems paying its short term obligations.
The Current ratio of FTNT (1.36) is comparable to the rest of the industry.
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.
Looking at the Quick ratio, with a value of 1.29, FTNT is in line with its industry, outperforming 42.05% of the companies in the same industry.
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.
| 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.
FTNT shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 36.84% yearly.
Looking at the last year, FTNT shows a quite strong growth in Revenue. The Revenue has grown by 13.83% in the last year.
FTNT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.46% yearly.
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
The Earnings Per Share is expected to grow by 9.15% on average over the next years. This is quite good.
FTNT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.49% yearly.
EPS Next Y6.82%
EPS Next 2Y10.34%
EPS Next 3Y12.2%
EPS Next 5Y9.15%
Revenue Next Year14.76%
Revenue Next 2Y13.84%
Revenue Next 3Y13.86%
Revenue Next 5Y13.49%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
FTNT is valuated quite expensively with a Price/Earnings ratio of 41.93.
Based on the Price/Earnings ratio, FTNT is valued a bit cheaper than the industry average as 63.96% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.45, FTNT is valued quite expensively.
FTNT is valuated quite expensively with a Price/Forward Earnings ratio of 36.62.
The rest of the industry has a similar Price/Forward Earnings ratio as FTNT.
FTNT is valuated expensively when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.93 | ||
| Fwd PE | 36.62 |
4.2 Price Multiples
FTNT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 72.08% of the companies in the same industry.
FTNT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 68.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.12 | ||
| EV/EBITDA | 36.58 |
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 12.20% in the coming years. This may justify a more expensive valuation.
PEG (NY)6.15
PEG (5Y)1.14
EPS Next 2Y10.34%
EPS Next 3Y12.2%
5. Dividend
5.1 Amount
FTNT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
105.66
+3.45 (+3.38%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners70.95%
Inst Owner Change-48.34%
Ins Owners16.94%
Ins Owner Change0.5%
Market Cap80.87B
Analysts68.63
Price Target110.36 (4.45%)
Short Float %2.78%
Short Ratio3.75
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)-4.07%
PT rev (3m)-5.66%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)1.23%
EPS NY rev (1m)0.35%
EPS NY rev (3m)0.37%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.3%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.93 | ||
| Fwd PE | 36.62 | ||
| P/S | 13.17 | ||
| P/FCF | 39.12 | ||
| P/OCF | 35.3 | ||
| P/B | 41.2 | ||
| P/tB | 50.37 | ||
| EV/EBITDA | 36.58 |
EPS(TTM)2.52
EY2.39%
EPS(NY)2.89
Fwd EY2.73%
FCF(TTM)2.7
FCFY2.56%
OCF(TTM)2.99
OCFY2.83%
SpS8.02
BVpS2.56
TBVpS2.1
PEG (NY)6.15
PEG (5Y)1.14
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 | 7.19 |
F-Score7
WACC10.96%
ROIC/WACC2.74
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 Y6.82%
EPS Next 2Y10.34%
EPS Next 3Y12.2%
EPS Next 5Y9.15%
Revenue 1Y (TTM)13.83%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.77%
Revenue Next Year14.76%
Revenue Next 2Y13.84%
Revenue Next 3Y13.86%
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%