FTNT gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 278 industry peers in the Software industry. FTNT gets an excellent profitability rating and is at the same time showing great financial health properties. 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 and quality investing!.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

FTNT had positive earnings in the past year.
In the past year FTNT had a positive cash flow from operations.
FTNT had positive earnings in each of the past 5 years.
FTNT had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With an excellent Return On Assets value of 20.01%, FTNT belongs to the best of the industry, outperforming 95.32% of the companies in the same industry.
FTNT's Return On Equity of 254.88% is amongst the best of the industry. FTNT outperforms 100.00% of its industry peers.
With an excellent Return On Invested Capital value of 38.77%, FTNT belongs to the best of the industry, outperforming 98.56% 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 10.76%.
The last Return On Invested Capital (38.77%) for FTNT is above the 3 year average (28.58%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	20.01%
ROE	254.88%
ROIC	38.77%

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 has a better Profit Margin (28.58%) than 88.85% of its industry peers.
In the last couple of years the Profit Margin of FTNT has grown nicely.
Looking at the Operating Margin, with a value of 30.86%, FTNT belongs to the top of the industry, outperforming 92.81% of the companies in the same industry.
FTNT's Operating Margin has improved in the last couple of years.
FTNT has a Gross Margin of 80.86%. This is amongst the best in the industry. FTNT outperforms 83.81% 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	30.86%
PM (TTM)	28.58%
GM	80.86%

OM growth 3Y16.85%

OM growth 5Y13.69%

PM growth 3Y17.3%

PM growth 5Y13.83%

GM growth 3Y1.97%

GM growth 5Y1.17%

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
Compared to 5 years ago, FTNT has less shares outstanding
Compared to 1 year ago, FTNT has an improved debt to assets ratio.

2.2 Solvency

FTNT has an Altman-Z score of 5.58. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
FTNT has a Altman-Z score of 5.58. This is in the better half of the industry: FTNT outperforms 75.18% of its industry peers.
The Debt to FCF ratio of FTNT is 0.49, which is an excellent value as it means it would take FTNT, only 0.49 years of fcf income to pay off all of its debts.
FTNT's Debt to FCF ratio of 0.49 is fine compared to the rest of the industry. FTNT outperforms 79.14% of its industry peers.
FTNT has a Debt/Equity ratio of 0.68. This is a neutral value indicating FTNT is somewhat dependend on debt financing.
The Debt to Equity ratio of FTNT (0.68) is worse than 70.14% 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	0.68
Debt/FCF	0.49
Altman-Z	5.58

ROIC/WACC3.5

WACC11.09%

2.3 Liquidity

FTNT has a Current Ratio of 1.03. This is a normal value and indicates that FTNT is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of FTNT (1.03) is worse than 73.02% of its industry peers.
A Quick Ratio of 0.94 indicates that FTNT may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.94, FTNT is doing worse than 76.26% 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	1.03
Quick Ratio	0.94

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

FTNT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.17%, which is quite impressive.
The Earnings Per Share has been growing by 36.84% on average over the past years. This is a very strong growth
Looking at the last year, FTNT shows a quite strong growth in Revenue. The Revenue has grown by 14.78% 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)26.17%

EPS 3Y43.86%

EPS 5Y36.84%

EPS Q2Q%17.46%

Revenue 1Y (TTM)14.78%

Revenue growth 3Y21.24%

Revenue growth 5Y22.46%

Sales Q2Q%14.38%

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 9.01% on average per year.
The Revenue is expected to grow by 12.42% on average over the next years. This is quite good.

EPS Next Y15.71%

EPS Next 2Y12.28%

EPS Next 3Y11.85%

EPS Next 5Y9.01%

Revenue Next Year14.66%

Revenue Next 2Y12.91%

Revenue Next 3Y12.15%

Revenue Next 5Y12.42%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 30.77, the valuation of FTNT can be described as expensive.
Based on the Price/Earnings ratio, FTNT is valued a bit cheaper than 61.87% of the companies in the same industry.
FTNT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 27.80 indicates a quite expensive valuation of FTNT.
61.87% of the companies in the same industry are more expensive than FTNT, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 25.98. FTNT is around the same levels.

		Industry Rank	Sector Rank
PE	30.77
Fwd PE	27.8

4.2 Price Multiples

70.50% of the companies in the same industry are more expensive than FTNT, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, FTNT is valued a bit cheaper than the industry average as 68.70% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	30.46
EV/EBITDA	26.97

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates FTNT does not grow enough to justify the current Price/Earnings ratio.
FTNT has an outstanding profitability rating, which may justify a higher PE ratio.