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 284 industry peers in the Software industry. While FTNT has a great profitability rating, there are some minor concerns on its financial health. FTNT is not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, FTNT could be worth investigating further for growth 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.
In the past 5 years FTNT always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 17.28%, FTNT belongs to the top of the industry, outperforming 93.50% of the companies in the same industry.
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 96.03% of the companies in the same industry.
FTNT had an Average Return On Invested Capital over the past 3 years of 21.99%. This is significantly above the industry average of 12.13%.
The last Return On Invested Capital (25.60%) for FTNT is above the 3 year average (21.99%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.28% | ||
| ROE | 168.47% | ||
| ROIC | 25.6% |
ROA(3y)13.28%
ROA(5y)12.09%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.99%
ROIC(5y)18.99%
1.3 Margins
The Profit Margin of FTNT (26.79%) is better than 91.70% of its industry peers.
In the last couple of years the Profit Margin of FTNT has grown nicely.
The Operating Margin of FTNT (28.19%) is better than 94.22% of its industry peers.
In the last couple of years the Operating Margin of FTNT has grown nicely.
FTNT has a Gross Margin of 79.71%. This is in the better half of the industry: FTNT outperforms 77.98% 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 | 28.19% | ||
| PM (TTM) | 26.79% | ||
| GM | 79.71% |
OM growth 3Y7.15%
OM growth 5Y12.69%
PM growth 3Y4.74%
PM growth 5Y3.25%
GM growth 3Y-0.58%
GM growth 5Y0.44%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), FTNT is creating value.
The number of shares outstanding for FTNT has been reduced compared to 1 year ago.
FTNT has less shares outstanding than it did 5 years ago.
FTNT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.17 indicates that FTNT is not in any danger for bankruptcy at the moment.
FTNT has a better Altman-Z score (7.17) than 72.92% of its industry peers.
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.
With a decent Debt to FCF ratio value of 0.60, FTNT is doing good in the industry, outperforming 75.81% of the companies in the same industry.
FTNT has a Debt/Equity ratio of 1.09. This is a high value indicating a heavy dependency on external financing.
FTNT has a worse Debt to Equity ratio (1.09) than 77.26% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 0.6 | ||
| Altman-Z | 7.17 |
ROIC/WACC2.34
WACC10.94%
2.3 Liquidity
FTNT has a Current Ratio of 1.34. 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 Current ratio, with a value of 1.34, FTNT is in line with its industry, outperforming 41.52% of the companies in the same industry.
FTNT has a Quick Ratio of 1.25. This is a normal value and indicates that FTNT is financially healthy and should not expect problems in meeting its short term obligations.
FTNT's Quick ratio of 1.25 is on the low side compared to the rest of the industry. FTNT is outperformed by 62.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
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.
FTNT shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 35.13% yearly.
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.
EPS 1Y (TTM)36.31%
EPS 3Y34.64%
EPS 5Y35.13%
EPS Q2Q%53.66%
Revenue 1Y (TTM)10.4%
Revenue growth 3Y26.92%
Revenue growth 5Y24.11%
Sales Q2Q%13%
3.2 Future
The Earnings Per Share is expected to grow by 15.34% on average over the next years. This is quite good.
The Revenue is expected to grow by 13.47% on average over the next years. This is quite good.
EPS Next Y39.66%
EPS Next 2Y23.11%
EPS Next 3Y19.82%
EPS Next 5Y15.34%
Revenue Next Year11.11%
Revenue Next 2Y11.86%
Revenue Next 3Y12.29%
Revenue Next 5Y13.47%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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 48.03, which means the current valuation is very expensive for FTNT.
Based on the Price/Earnings ratio, FTNT is valued a bit cheaper than the industry average as 62.82% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.47. FTNT is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 41.35, the valuation of FTNT can be described as expensive.
Based on the Price/Forward Earnings ratio, FTNT is valued a bit cheaper than the industry average as 62.45% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 92.74, FTNT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.03 | ||
| Fwd PE | 41.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FTNT is valued a bit cheaper than the industry average as 71.12% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, FTNT is valued a bit cheaper than the industry average as 67.51% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.34 | ||
| EV/EBITDA | 42.49 |
4.3 Compensation for Growth
FTNT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
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 19.82% in the coming years.
PEG (NY)1.21
PEG (5Y)1.37
EPS Next 2Y23.11%
EPS Next 3Y19.82%
5. Dividend
5.1 Amount
FTNT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
FORTINET INC
NASDAQ:FTNT (2/4/2025, 8:00:00 PM)
After market: 102.99 +0.21 (+0.2%)102.78
+1.88 (+1.86%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners70.59%
Inst Owner Change-0.51%
Ins Owners17.47%
Ins Owner Change0.38%
Market Cap78.78B
Analysts70.8
Price Target100.82 (-1.91%)
Short Float %2.37%
Short Ratio3.6
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)28.16%
Min EPS beat(2)19.74%
Max EPS beat(2)36.59%
EPS beat(4)4
Avg EPS beat(4)20.37%
Min EPS beat(4)9.53%
Max EPS beat(4)36.59%
EPS beat(8)8
Avg EPS beat(8)15.91%
EPS beat(12)12
Avg EPS beat(12)14.59%
EPS beat(16)16
Avg EPS beat(16)12.47%
Revenue beat(2)1
Avg Revenue beat(2)0.05%
Min Revenue beat(2)-0.13%
Max Revenue beat(2)0.23%
Revenue beat(4)1
Avg Revenue beat(4)-0.57%
Min Revenue beat(4)-1.52%
Max Revenue beat(4)0.23%
Revenue beat(8)2
Avg Revenue beat(8)-0.97%
Revenue beat(12)4
Avg Revenue beat(12)-0.4%
Revenue beat(16)8
Avg Revenue beat(16)0.57%
PT rev (1m)3.22%
PT rev (3m)30.42%
EPS NQ rev (1m)0%
EPS NQ rev (3m)24.45%
EPS NY rev (1m)0.01%
EPS NY rev (3m)10.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.5%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.03 | ||
| Fwd PE | 41.35 | ||
| P/S | 13.79 | ||
| P/FCF | 47.34 | ||
| P/OCF | 39.94 | ||
| P/B | 86.75 | ||
| P/tB | 134.96 | ||
| EV/EBITDA | 42.49 |
EPS(TTM)2.14
EY2.08%
EPS(NY)2.49
Fwd EY2.42%
FCF(TTM)2.17
FCFY2.11%
OCF(TTM)2.57
OCFY2.5%
SpS7.45
BVpS1.18
TBVpS0.76
PEG (NY)1.21
PEG (5Y)1.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.28% | ||
| ROE | 168.47% | ||
| ROCE | 32.41% | ||
| ROIC | 25.6% | ||
| ROICexc | 100.36% | ||
| ROICexgc | 134.89% | ||
| OM | 28.19% | ||
| PM (TTM) | 26.79% | ||
| GM | 79.71% | ||
| FCFM | 29.14% |
ROA(3y)13.28%
ROA(5y)12.09%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.99%
ROIC(5y)18.99%
ROICexc(3y)72.9%
ROICexc(5y)79.8%
ROICexgc(3y)88.16%
ROICexgc(5y)104.96%
ROCE(3y)27.83%
ROCE(5y)24.04%
ROICexcg growth 3Y-12.11%
ROICexcg growth 5Y-8.61%
ROICexc growth 3Y-4.75%
ROICexc growth 5Y-3.49%
OM growth 3Y7.15%
OM growth 5Y12.69%
PM growth 3Y4.74%
PM growth 5Y3.25%
GM growth 3Y-0.58%
GM growth 5Y0.44%
F-Score8
Asset Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 0.6 | ||
| Debt/EBITDA | 0.58 | ||
| Cap/Depr | 261.63% | ||
| Cap/Sales | 5.4% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 114.14% | ||
| Profit Quality | 108.77% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.25 | ||
| Altman-Z | 7.17 |
F-Score8
WACC10.94%
ROIC/WACC2.34
Cap/Depr(3y)266.73%
Cap/Depr(5y)226.57%
Cap/Sales(3y)6.36%
Cap/Sales(5y)5.64%
Profit Quality(3y)172.77%
Profit Quality(5y)186.03%
High Growth Momentum
Growth
EPS 1Y (TTM)36.31%
EPS 3Y34.64%
EPS 5Y35.13%
EPS Q2Q%53.66%
EPS Next Y39.66%
EPS Next 2Y23.11%
EPS Next 3Y19.82%
EPS Next 5Y15.34%
Revenue 1Y (TTM)10.4%
Revenue growth 3Y26.92%
Revenue growth 5Y24.11%
Sales Q2Q%13%
Revenue Next Year11.11%
Revenue Next 2Y11.86%
Revenue Next 3Y12.29%
Revenue Next 5Y13.47%
EBIT growth 1Y33.19%
EBIT growth 3Y36%
EBIT growth 5Y39.87%
EBIT Next Year43.81%
EBIT Next 3Y21.58%
EBIT Next 5Y21.73%
FCF growth 1Y42.5%
FCF growth 3Y21.82%
FCF growth 5Y24.2%
OCF growth 1Y25.67%
OCF growth 3Y21.33%
OCF growth 5Y24.82%