FORTINET INC (FTNT) Stock Fundamental Analysis
NASDAQ:FTNT - Nasdaq - US34959E1091 - Common Stock - Currency: USD
Overall FTNT gets a fundamental rating of 7 out of 10. We evaluated FTNT against 282 industry peers in the Software industry. Both the health and profitability get an excellent rating, making FTNT a very profitable company, without any liquidiy or solvency issues. FTNT is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings would make FTNT suitable 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.
Each year in the past 5 years FTNT has been profitable.
Each year in the past 5 years FTNT had a positive operating cash flow.
1.2 Ratios
FTNT has a better Return On Assets (18.06%) than 93.97% of its industry peers.
FTNT has a Return On Equity of 95.74%. This is amongst the best in the industry. FTNT outperforms 98.94% of its industry peers.
With an excellent Return On Invested Capital value of 30.04%, FTNT belongs to the best of the industry, outperforming 96.81% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for FTNT is significantly above the industry average of 12.17%.
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
FTNT's Profit Margin of 30.60% is amongst the best of the industry. FTNT outperforms 94.68% of its industry peers.
FTNT's Profit Margin has improved in the last couple of years.
The Operating Margin of FTNT (31.67%) is better than 95.74% of its industry peers.
In the last couple of years the Operating Margin of FTNT has grown nicely.
Looking at the Gross Margin, with a value of 81.65%, FTNT belongs to the top of the industry, outperforming 86.17% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), FTNT is creating value.
FTNT has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for FTNT has been reduced compared to 5 years ago.
FTNT has a better debt/assets ratio than last year.
2.2 Solvency
FTNT has an Altman-Z score of 7.18. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
FTNT has a better Altman-Z score (7.18) than 76.95% of its industry peers.
FTNT has a debt to FCF ratio of 0.48. This is a very positive value and a sign of high solvency as it would only need 0.48 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.48, FTNT is in the better half of the industry, outperforming 78.37% of the companies in the same industry.
A Debt/Equity ratio of 0.25 indicates that FTNT is not too dependend on debt financing.
FTNT has a Debt to Equity ratio (0.25) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.48 | ||
| Altman-Z | 7.18 |
ROIC/WACC2.79
WACC10.78%
2.3 Liquidity
A Current Ratio of 1.36 indicates that FTNT should not have too much problems paying its short term obligations.
FTNT has a Current ratio of 1.36. This is comparable to the rest of the industry: FTNT outperforms 43.62% of its industry peers.
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 42.20% of the companies in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 45.66% over the past year.
Measured over the past years, FTNT shows a very strong growth in Earnings Per Share. The EPS has been growing by 36.84% on average per year.
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
Based on estimates for the next years, FTNT will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.15% on average per year.
The Revenue is expected to grow by 13.49% on average over the next years. This is quite good.
EPS Next Y6.77%
EPS Next 2Y10.3%
EPS Next 3Y12.12%
EPS Next 5Y9.15%
Revenue Next Year14.71%
Revenue Next 2Y13.76%
Revenue Next 3Y13.71%
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
The Price/Earnings ratio is 41.83, which means the current valuation is very expensive for FTNT.
Based on the Price/Earnings ratio, FTNT is valued a bit cheaper than 64.18% of the companies in the same industry.
FTNT's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.50.
Based on the Price/Forward Earnings ratio of 36.56, the valuation of FTNT can be described as expensive.
FTNT's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.44, FTNT is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.83 | ||
| Fwd PE | 36.56 |
4.2 Price Multiples
71.28% of the companies in the same industry are more expensive than FTNT, based on the Enterprise Value to EBITDA ratio.
FTNT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 68.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.03 | ||
| EV/EBITDA | 36.49 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
FTNT has an outstanding profitability rating, which may justify a higher PE ratio.
FTNT's earnings are expected to grow with 12.12% in the coming years. This may justify a more expensive valuation.
PEG (NY)6.18
PEG (5Y)1.14
EPS Next 2Y10.3%
EPS Next 3Y12.12%
5. Dividend
5.1 Amount
No dividends for FTNT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
105.42
+0.5 (+0.48%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners70.95%
Inst Owner Change-0.18%
Ins Owners16.94%
Ins Owner Change0.5%
Market Cap80.69B
Analysts68.63
Price Target110.69 (5%)
Short Float %3.11%
Short Ratio4.05
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)-0.02%
PT rev (3m)-5.37%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)1.2%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.3%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.83 | ||
| Fwd PE | 36.56 | ||
| P/S | 13.14 | ||
| P/FCF | 39.03 | ||
| P/OCF | 35.22 | ||
| P/B | 41.11 | ||
| P/tB | 50.26 | ||
| EV/EBITDA | 36.49 |
EPS(TTM)2.52
EY2.39%
EPS(NY)2.88
Fwd EY2.73%
FCF(TTM)2.7
FCFY2.56%
OCF(TTM)2.99
OCFY2.84%
SpS8.02
BVpS2.56
TBVpS2.1
PEG (NY)6.18
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 | 7.18 |
F-Score7
WACC10.78%
ROIC/WACC2.79
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 Y6.77%
EPS Next 2Y10.3%
EPS Next 3Y12.12%
EPS Next 5Y9.15%
Revenue 1Y (TTM)13.83%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.77%
Revenue Next Year14.71%
Revenue Next 2Y13.76%
Revenue Next 3Y13.71%
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%