FORTINET INC (FTNT) Stock Fundamental Analysis
NASDAQ:FTNT - Nasdaq - US34959E1091 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to FTNT. FTNT was compared to 285 industry peers in the Software industry. FTNT gets an excellent profitability rating and is at the same time showing great financial health properties. FTNT shows excellent growth, but is valued quite expensive already. 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.
In the past 5 years FTNT has always been profitable.
FTNT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of FTNT (17.88%) is better than 94.70% of its industry peers.
Looking at the Return On Equity, with a value of 116.83%, FTNT belongs to the top of the industry, outperforming 98.94% of the companies in the same industry.
The Return On Invested Capital of FTNT (27.67%) is better than 96.82% 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 11.25%.
| 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
With an excellent Profit Margin value of 29.30%, FTNT belongs to the best of the industry, outperforming 92.23% of the companies in the same industry.
In the last couple of years the Profit Margin of FTNT has grown nicely.
FTNT has a Operating Margin of 30.20%. This is amongst the best in the industry. FTNT outperforms 94.70% of its industry peers.
In the last couple of years the Operating Margin of FTNT has grown nicely.
FTNT has a Gross Margin of 80.56%. This is amongst the best in the industry. FTNT outperforms 82.69% 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 | 30.2% | ||
| 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
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 remains at a similar level compared to 1 year ago.
FTNT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, FTNT has an improved debt to assets ratio.
2.2 Solvency
FTNT has an Altman-Z score of 6.80. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
FTNT has a better Altman-Z score (6.80) than 78.45% 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.
With a decent Debt to FCF ratio value of 0.53, FTNT is doing good in the industry, outperforming 77.03% of the companies in the same industry.
FTNT has a Debt/Equity ratio of 0.67. This is a neutral value indicating FTNT is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.67, FTNT is not doing good in the industry: 69.61% of the companies in the same industry are doing better.
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 | 6.8 |
ROIC/WACC2.54
WACC10.89%
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 45.58% of its industry peers.
A Quick Ratio of 1.39 indicates that FTNT should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.39, FTNT perfoms like the industry average, outperforming 44.88% 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 | 1.47 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 44.51% over the past year.
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 12.27% 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)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
The Earnings Per Share is expected to grow by 9.09% 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 13.70% on average per year.
EPS Next Y6.43%
EPS Next 2Y10.09%
EPS Next 3Y13.25%
EPS Next 5Y9.09%
Revenue Next Year14.96%
Revenue Next 2Y13.98%
Revenue Next 3Y14.84%
Revenue Next 5Y13.7%
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.
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
A Price/Earnings ratio of 40.56 indicates a quite expensive valuation of FTNT.
Compared to the rest of the industry, the Price/Earnings ratio of FTNT is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.29. FTNT is valued slightly more expensive when compared to this.
The Price/Forward Earnings ratio is 38.11, which means the current valuation is very expensive for FTNT.
FTNT's Price/Forward Earnings ratio is in line with the industry average.
FTNT is valuated expensively when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.56 | ||
| Fwd PE | 38.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FTNT is valued a bit cheaper than 69.26% of the companies in the same industry.
FTNT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 61.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.34 | ||
| EV/EBITDA | 36.25 |
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.
FTNT's earnings are expected to grow with 13.25% in the coming years. This may justify a more expensive valuation.
PEG (NY)6.31
PEG (5Y)1.1
EPS Next 2Y10.09%
EPS Next 3Y13.25%
5. Dividend
5.1 Amount
FTNT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
96.13
+0.06 (+0.06%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners70.96%
Inst Owner Change0.01%
Ins Owners17.47%
Ins Owner Change0.65%
Market Cap73.92B
Analysts69.8
Price Target116.98 (21.69%)
Short Float %2.83%
Short Ratio3.83
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)0%
PT rev (3m)19.76%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)0.72%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)1.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.58%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.56 | ||
| Fwd PE | 38.11 | ||
| P/S | 12.41 | ||
| P/FCF | 39.34 | ||
| P/OCF | 32.74 | ||
| P/B | 49.49 | ||
| P/tB | 64.65 | ||
| EV/EBITDA | 36.25 |
EPS(TTM)2.37
EY2.47%
EPS(NY)2.52
Fwd EY2.62%
FCF(TTM)2.44
FCFY2.54%
OCF(TTM)2.94
OCFY3.05%
SpS7.75
BVpS1.94
TBVpS1.49
PEG (NY)6.31
PEG (5Y)1.1
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 | 6.8 |
F-Score7
WACC10.89%
ROIC/WACC2.54
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 Y6.43%
EPS Next 2Y10.09%
EPS Next 3Y13.25%
EPS Next 5Y9.09%
Revenue 1Y (TTM)12.27%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%17.31%
Revenue Next Year14.96%
Revenue Next 2Y13.98%
Revenue Next 3Y14.84%
Revenue Next 5Y13.7%
EBIT growth 1Y45.48%
EBIT growth 3Y41.66%
EBIT growth 5Y39.22%
EBIT Next Year17.4%
EBIT Next 3Y16.55%
EBIT Next 5Y16.33%
FCF growth 1Y8.54%
FCF growth 3Y16%
FCF growth 5Y21.29%
OCF growth 1Y16.67%
OCF growth 3Y14.62%
OCF growth 5Y22.82%