FORTINET INC (FTNT)
US34959E1091 - Common Stock
Overall FTNT gets a fundamental rating of 7 out of 10. We evaluated FTNT against 280 industry peers in the Software industry. FTNT has an excellent profitability rating, but 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! These ratings would make FTNT suitable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year FTNT was profitable.
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
Looking at the Return On Assets, with a value of 17.28%, FTNT belongs to the top of the industry, outperforming 93.04% of the companies in the same industry.
With an excellent Return On Equity value of 168.47%, FTNT belongs to the best of the industry, outperforming 99.63% of the companies in the same industry.
FTNT has a Return On Invested Capital of 25.60%. This is amongst the best in the industry. FTNT outperforms 95.97% of its industry peers.
The Average Return On Invested Capital over the past 3 years for FTNT is significantly above the industry average of 12.15%.
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 92.31% of its industry peers.
FTNT's Profit Margin has improved in the last couple of years.
FTNT has a Operating Margin of 28.19%. This is amongst the best in the industry. FTNT outperforms 93.77% of its industry peers.
In the last couple of years the Operating Margin of FTNT has grown nicely.
FTNT has a better Gross Margin (79.71%) than 77.66% 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
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 less shares outstanding
FTNT has less shares outstanding than it did 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 6.81 indicates that FTNT is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.81, FTNT is in the better half of the industry, outperforming 72.53% of the companies in the same industry.
The Debt to FCF ratio of FTNT is 0.60, which is an excellent value as it means it would take FTNT, only 0.60 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of FTNT (0.60) is better than 75.82% of its industry peers.
FTNT has a Debt/Equity ratio of 1.09. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.09, FTNT is doing worse than 77.29% of the companies in the same industry.
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 | 6.81 |
ROIC/WACC2.24
WACC11.43%
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 40.66% 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 has a Quick ratio of 1.25. This is in the lower half of the industry: FTNT underperforms 63.00% 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.
Looking at the last year, FTNT shows a quite strong growth in Revenue. The Revenue has grown by 10.40% in the last year.
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
Based on estimates for the next years, FTNT will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.86% on average per year.
FTNT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.94% yearly.
EPS Next Y39.65%
EPS Next 2Y23.1%
EPS Next 3Y19.79%
EPS Next 5Y16.86%
Revenue Next Year11.15%
Revenue Next 2Y11.89%
Revenue Next 3Y12.29%
Revenue Next 5Y13.94%
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.
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
FTNT is valuated quite expensively with a Price/Earnings ratio of 45.55.
Based on the Price/Earnings ratio, FTNT is valued a bit cheaper than 63.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.41, FTNT is valued quite expensively.
The Price/Forward Earnings ratio is 39.22, which means the current valuation is very expensive for FTNT.
FTNT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 61.90% of the companies in the same industry.
FTNT is valuated expensively when we compare the Price/Forward Earnings ratio to 23.69, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.55 | ||
| Fwd PE | 39.22 |
4.2 Price Multiples
FTNT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 69.96% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of FTNT indicates a somewhat cheap valuation: FTNT is cheaper than 66.30% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.9 | ||
| EV/EBITDA | 39.76 |
4.3 Compensation for Growth
The 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 19.79% in the coming years.
PEG (NY)1.15
PEG (5Y)1.3
EPS Next 2Y23.1%
EPS Next 3Y19.79%
5. Dividend
5.1 Amount
No dividends for FTNT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
FORTINET INC
NASDAQ:FTNT (1/3/2025, 8:00:01 PM)
After market: 97.51 +0.04 (+0.04%)97.47
+2.72 (+2.87%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners70.59%
Inst Owner Change-2%
Ins Owners17.47%
Ins Owner Change0.36%
Market Cap74.71B
Analysts70.8
Price Target97.68 (0.22%)
Short Float %2.42%
Short Ratio3.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/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)1.83%
PT rev (3m)29.78%
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)0.62%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.55 | ||
| Fwd PE | 39.22 | ||
| P/S | 13.08 | ||
| P/FCF | 44.9 | ||
| P/OCF | 37.88 | ||
| P/B | 82.27 | ||
| P/tB | 127.99 | ||
| EV/EBITDA | 39.76 |
EPS(TTM)2.14
EY2.2%
EPS(NY)2.49
Fwd EY2.55%
FCF(TTM)2.17
FCFY2.23%
OCF(TTM)2.57
OCFY2.64%
SpS7.45
BVpS1.18
TBVpS0.76
PEG (NY)1.15
PEG (5Y)1.3
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 | 6.81 |
F-Score8
WACC11.43%
ROIC/WACC2.24
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 Y39.65%
EPS Next 2Y23.1%
EPS Next 3Y19.79%
EPS Next 5Y16.86%
Revenue 1Y (TTM)10.4%
Revenue growth 3Y26.92%
Revenue growth 5Y24.11%
Sales Q2Q%13%
Revenue Next Year11.15%
Revenue Next 2Y11.89%
Revenue Next 3Y12.29%
Revenue Next 5Y13.94%
EBIT growth 1Y33.19%
EBIT growth 3Y36%
EBIT growth 5Y39.87%
EBIT Next Year43.74%
EBIT Next 3Y21.37%
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%