FORTINET INC (FTNT) Stock Fundamental Analysis
USA - NASDAQ:FTNT - US34959E1091 - Common Stock
83.44 USD
+0.3 (+0.36%)
83.44 USD
0 (0%)
Taking everything into account, FTNT scores 7 out of 10 in our fundamental rating. FTNT was compared to 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.
In the past 5 years FTNT always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 18.23%, FTNT belongs to the best of the industry, outperforming 93.62% of the companies in the same industry.
FTNT has a better Return On Equity (94.14%) than 98.94% of its industry peers.
The Return On Invested Capital of FTNT (29.24%) is better than 96.81% of its industry peers.
FTNT had an Average Return On Invested Capital over the past 3 years of 28.58%. This is significantly above the industry average of 11.88%.
The last Return On Invested Capital (29.24%) for FTNT is above the 3 year average (28.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.23% | ||
| ROE | 94.14% | ||
| ROIC | 29.24% |
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
With an excellent Profit Margin value of 30.60%, FTNT belongs to the best of the industry, outperforming 91.13% of the companies in the same industry.
FTNT's Profit Margin has improved in the last couple of years.
FTNT has a Operating Margin of 30.85%. This is amongst the best in the industry. FTNT outperforms 93.26% of its industry peers.
In the last couple of years the Operating Margin of FTNT has grown nicely.
FTNT has a better Gross Margin (81.42%) than 86.52% of its industry peers.
FTNT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.85% | ||
| PM (TTM) | 30.6% | ||
| GM | 81.42% |
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.
FTNT has less shares outstanding than it did 5 years ago.
FTNT has a better debt/assets ratio than last year.
2.2 Solvency
FTNT has an Altman-Z score of 5.88. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.88, FTNT is in the better half of the industry, outperforming 72.34% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 0.49, FTNT is in the better half of the industry, outperforming 78.72% of the companies in the same industry.
A Debt/Equity ratio of 0.24 indicates that FTNT is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.24, FTNT is in line with its industry, outperforming 44.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 0.49 | ||
| Altman-Z | 5.88 |
ROIC/WACC2.61
WACC11.19%
2.3 Liquidity
FTNT has a Current Ratio of 1.33. 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 Current ratio (1.33) which is comparable to the rest of the industry.
A Quick Ratio of 1.24 indicates that FTNT should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.24, FTNT is in line with its industry, outperforming 40.07% 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 | 1.33 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
FTNT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 34.90%, 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
FTNT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.46%.
Measured over the past years, FTNT shows a very strong growth in Revenue. The Revenue has been growing by 22.46% on average per year.
EPS 1Y (TTM)34.9%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%12.28%
Revenue 1Y (TTM)14.46%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.64%
3.2 Future
The Earnings Per Share is expected to grow by 8.97% on average over the next years. This is quite good.
Based on estimates for the next years, FTNT will show a quite strong growth in Revenue. The Revenue will grow by 13.02% on average per year.
EPS Next Y8.43%
EPS Next 2Y9.59%
EPS Next 3Y10.3%
EPS Next 5Y8.97%
Revenue Next Year14.59%
Revenue Next 2Y13.11%
Revenue Next 3Y12.31%
Revenue Next 5Y13.02%
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
Based on the Price/Earnings ratio of 32.22, 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 64.18% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.40, FTNT is valued at the same level.
FTNT is valuated quite expensively with a Price/Forward Earnings ratio of 29.32.
63.83% of the companies in the same industry are more expensive than FTNT, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of FTNT to the average of the S&P500 Index (22.94), we can say FTNT is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.22 | ||
| Fwd PE | 29.32 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 74.82% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, FTNT is valued a bit cheaper than 69.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.45 | ||
| EV/EBITDA | 28.15 |
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.
PEG (NY)3.82
PEG (5Y)0.87
EPS Next 2Y9.59%
EPS Next 3Y10.3%
5. Dividend
5.1 Amount
No dividends for FTNT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
83.44
+0.3 (+0.36%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners71.66%
Inst Owner Change-0.13%
Ins Owners16.86%
Ins Owner Change-0.78%
Market Cap63.94B
Analysts68.24
Price Target91.35 (9.48%)
Short Float %3.05%
Short Ratio2.44
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)6.39%
Min EPS beat(2)6.18%
Max EPS beat(2)6.61%
EPS beat(4)4
Avg EPS beat(4)13.02%
Min EPS beat(4)6.18%
Max EPS beat(4)19.74%
EPS beat(8)8
Avg EPS beat(8)15.55%
EPS beat(12)12
Avg EPS beat(12)14.84%
EPS beat(16)16
Avg EPS beat(16)13.18%
Revenue beat(2)0
Avg Revenue beat(2)-1.81%
Min Revenue beat(2)-1.99%
Max Revenue beat(2)-1.63%
Revenue beat(4)1
Avg Revenue beat(4)-0.41%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)2.1%
Revenue beat(8)2
Avg Revenue beat(8)-0.84%
Revenue beat(12)4
Avg Revenue beat(12)-0.75%
Revenue beat(16)6
Avg Revenue beat(16)-0.1%
PT rev (1m)-0.34%
PT rev (3m)-17.22%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)2.78%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)1.51%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.57%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.22 | ||
| Fwd PE | 29.32 | ||
| P/S | 10.09 | ||
| P/FCF | 31.45 | ||
| P/OCF | 26.63 | ||
| P/B | 31.03 | ||
| P/tB | 38.1 | ||
| EV/EBITDA | 28.15 |
EPS(TTM)2.59
EY3.1%
EPS(NY)2.85
Fwd EY3.41%
FCF(TTM)2.65
FCFY3.18%
OCF(TTM)3.13
OCFY3.76%
SpS8.27
BVpS2.69
TBVpS2.19
PEG (NY)3.82
PEG (5Y)0.87
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.23% | ||
| ROE | 94.14% | ||
| ROCE | 33.34% | ||
| ROIC | 29.24% | ||
| ROICexc | 131.78% | ||
| ROICexgc | 186.57% | ||
| OM | 30.85% | ||
| PM (TTM) | 30.6% | ||
| GM | 81.42% | ||
| FCFM | 32.07% |
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-Score8
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 0.49 | ||
| Debt/EBITDA | 0.24 | ||
| Cap/Depr | 264.7% | ||
| Cap/Sales | 5.81% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 114.64% | ||
| Profit Quality | 104.8% | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.24 | ||
| Altman-Z | 5.88 |
F-Score8
WACC11.19%
ROIC/WACC2.61
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)34.9%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%12.28%
EPS Next Y8.43%
EPS Next 2Y9.59%
EPS Next 3Y10.3%
EPS Next 5Y8.97%
Revenue 1Y (TTM)14.46%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%13.64%
Revenue Next Year14.59%
Revenue Next 2Y13.11%
Revenue Next 3Y12.31%
Revenue Next 5Y13.02%
EBIT growth 1Y34.55%
EBIT growth 3Y41.66%
EBIT growth 5Y39.22%
EBIT Next Year19.33%
EBIT Next 3Y14.96%
EBIT Next 5Y17.24%
FCF growth 1Y2.77%
FCF growth 3Y16%
FCF growth 5Y21.29%
OCF growth 1Y8.95%
OCF growth 3Y14.62%
OCF growth 5Y22.82%