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 283 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 growing strongly while it is still valued neutral. This is a good combination! With these ratings, FTNT could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
In the past year FTNT was profitable.
In the past year FTNT had a positive cash flow from operations.
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
FTNT has a better Return On Assets (17.88%) than 94.35% of its industry peers.
FTNT has a Return On Equity of 116.83%. This is amongst the best in the industry. FTNT outperforms 99.29% of its industry peers.
Looking at the Return On Invested Capital, with a value of 27.67%, FTNT belongs to the top of the industry, outperforming 97.17% of the companies in the same industry.
FTNT had an Average Return On Invested Capital over the past 3 years of 28.58%. This is significantly above the industry average of 10.81%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.88% | ||
| ROE | 116.83% | ||
| ROIC | 27.67% |
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 29.30% is amongst the best of the industry. FTNT outperforms 93.29% of its industry peers.
FTNT's Profit Margin has improved in the last couple of years.
FTNT has a better Operating Margin (30.20%) than 94.70% of its industry peers.
FTNT's Operating Margin has improved in the last couple of years.
FTNT has a Gross Margin of 80.56%. This is amongst the best in the industry. FTNT outperforms 81.98% of its industry peers.
FTNT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.2% | ||
| PM (TTM) | 29.3% | ||
| GM | 80.56% |
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
FTNT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, FTNT has about the same amount of shares outstanding.
The number of shares outstanding for FTNT has been reduced compared to 5 years ago.
The debt/assets ratio for FTNT has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.09 indicates that FTNT is not in any danger for bankruptcy at the moment.
The Altman-Z score of FTNT (7.09) is better than 77.39% of its industry peers.
FTNT has a debt to FCF ratio of 0.53. This is a very positive value and a sign of high solvency as it would only need 0.53 years to pay back of all of its debts.
FTNT has a Debt to FCF ratio of 0.53. This is in the better half of the industry: FTNT outperforms 75.97% of its industry peers.
A Debt/Equity ratio of 0.67 indicates that FTNT is somewhat dependend on debt financing.
The Debt to Equity ratio of FTNT (0.67) is worse than 68.90% 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 | 0.67 | ||
| Debt/FCF | 0.53 | ||
| Altman-Z | 7.09 |
ROIC/WACC1.99
WACC13.93%
2.3 Liquidity
A Current Ratio of 1.47 indicates that FTNT should not have too much problems paying its short term obligations.
FTNT has a Current ratio of 1.47. This is comparable to the rest of the industry: FTNT outperforms 45.94% of its industry peers.
FTNT has a Quick Ratio of 1.39. This is a normal value and indicates that FTNT is financially healthy and should not expect problems in meeting its short term obligations.
FTNT has a Quick ratio (1.39) which is comparable to the rest of the 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 | 1.47 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 44.51% 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.
The Revenue has grown by 12.27% in the past year. This is quite good.
The Revenue has been growing by 22.46% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)44.51%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%45.1%
Revenue 1Y (TTM)12.27%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%17.31%
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 16.56% on average per year.
Based on estimates for the next years, FTNT will show a quite strong growth in Revenue. The Revenue will grow by 13.41% on average per year.
EPS Next Y6.49%
EPS Next 2Y10.19%
EPS Next 3Y13.65%
EPS Next 5Y16.56%
Revenue Next Year14.96%
Revenue Next 2Y14%
Revenue Next 3Y14.84%
Revenue Next 5Y13.42%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 42.73, the valuation of FTNT can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 61.84% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.35. FTNT is valued slightly more expensive when compared to this.
The Price/Forward Earnings ratio is 40.13, which means the current valuation is very expensive for FTNT.
FTNT's Price/Forward Earnings is on the same level as the industry average.
FTNT is valuated expensively when we compare the Price/Forward Earnings ratio to 22.10, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.73 | ||
| Fwd PE | 40.13 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FTNT is valued a bit cheaper than the industry average as 71.38% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 65.37% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.44 | ||
| EV/EBITDA | 38.31 |
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.
A more expensive valuation may be justified as FTNT's earnings are expected to grow with 13.65% in the coming years.
PEG (NY)6.58
PEG (5Y)1.16
EPS Next 2Y10.19%
EPS Next 3Y13.65%
5. Dividend
5.1 Amount
FTNT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
101.28
-0.44 (-0.43%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners70.96%
Inst Owner Change3.91%
Ins Owners17.47%
Ins Owner Change1.31%
Market Cap77.88B
Analysts69.8
Price Target116.98 (15.5%)
Short Float %2.15%
Short Ratio2.97
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)19.66%
Min EPS beat(2)19.58%
Max EPS beat(2)19.74%
EPS beat(4)4
Avg EPS beat(4)21.36%
Min EPS beat(4)9.53%
Max EPS beat(4)36.59%
EPS beat(8)8
Avg EPS beat(8)17.09%
EPS beat(12)12
Avg EPS beat(12)15.8%
EPS beat(16)16
Avg EPS beat(16)13.22%
Revenue beat(2)1
Avg Revenue beat(2)0.99%
Min Revenue beat(2)-0.13%
Max Revenue beat(2)2.1%
Revenue beat(4)2
Avg Revenue beat(4)0.34%
Min Revenue beat(4)-0.86%
Max Revenue beat(4)2.1%
Revenue beat(8)3
Avg Revenue beat(8)-0.36%
Revenue beat(12)5
Avg Revenue beat(12)-0.09%
Revenue beat(16)8
Avg Revenue beat(16)0.61%
PT rev (1m)16.03%
PT rev (3m)21.41%
EPS NQ rev (1m)0.98%
EPS NQ rev (3m)0.74%
EPS NY rev (1m)1.54%
EPS NY rev (3m)1.81%
Revenue NQ rev (1m)0.71%
Revenue NQ rev (3m)0.58%
Revenue NY rev (1m)2.11%
Revenue NY rev (3m)2.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.73 | ||
| Fwd PE | 40.13 | ||
| P/S | 13.08 | ||
| P/FCF | 41.44 | ||
| P/OCF | 34.49 | ||
| P/B | 52.14 | ||
| P/tB | 68.11 | ||
| EV/EBITDA | 38.31 |
EPS(TTM)2.37
EY2.34%
EPS(NY)2.52
Fwd EY2.49%
FCF(TTM)2.44
FCFY2.41%
OCF(TTM)2.94
OCFY2.9%
SpS7.75
BVpS1.94
TBVpS1.49
PEG (NY)6.58
PEG (5Y)1.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.88% | ||
| ROE | 116.83% | ||
| ROCE | 31.54% | ||
| ROIC | 27.67% | ||
| ROICexc | 96.45% | ||
| ROICexgc | 122.74% | ||
| OM | 30.2% | ||
| PM (TTM) | 29.3% | ||
| GM | 80.56% | ||
| FCFM | 31.55% |
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 Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 0.53 | ||
| Debt/EBITDA | 0.52 | ||
| Cap/Depr | 308.55% | ||
| Cap/Sales | 6.36% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 117.51% | ||
| Profit Quality | 107.68% | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.39 | ||
| Altman-Z | 7.09 |
F-Score7
WACC13.93%
ROIC/WACC1.99
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)44.51%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%45.1%
EPS Next Y6.49%
EPS Next 2Y10.19%
EPS Next 3Y13.65%
EPS Next 5Y16.56%
Revenue 1Y (TTM)12.27%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%17.31%
Revenue Next Year14.96%
Revenue Next 2Y14%
Revenue Next 3Y14.84%
Revenue Next 5Y13.42%
EBIT growth 1Y45.48%
EBIT growth 3Y41.66%
EBIT growth 5Y39.22%
EBIT Next Year14.96%
EBIT Next 3Y20.38%
EBIT Next 5Y18.33%
FCF growth 1Y8.54%
FCF growth 3Y16%
FCF growth 5Y21.29%
OCF growth 1Y16.67%
OCF growth 3Y14.62%
OCF growth 5Y22.82%