FORTINET INC (FTNT) Stock Fundamental Analysis
USA - NASDAQ:FTNT - US34959E1091 - Common Stock
82.28 USD
+0.49 (+0.6%)
81.94 USD
-0.34 (-0.41%)
We assign a fundamental rating of 7 out of 10 to FTNT. FTNT was compared to 281 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! This makes FTNT very considerable 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.
Each year in the past 5 years FTNT has been profitable.
FTNT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
FTNT has a better Return On Assets (20.01%) than 94.66% of its industry peers.
The Return On Equity of FTNT (254.88%) is better than 100.00% of its industry peers.
FTNT's Return On Invested Capital of 38.77% is amongst the best of the industry. FTNT outperforms 98.22% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for FTNT is significantly above the industry average of 11.82%.
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
Looking at the Profit Margin, with a value of 28.58%, FTNT belongs to the top of the industry, outperforming 90.04% 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 30.86%. This is amongst the best in the industry. FTNT outperforms 92.53% of its industry peers.
FTNT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 80.86%, FTNT belongs to the top of the industry, outperforming 83.99% of the companies in the same industry.
FTNT's Gross Margin has been stable in the last couple of years.
| 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%
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.
FTNT has about the same amout of shares outstanding than it did 1 year ago.
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
FTNT has an Altman-Z score of 5.67. This indicates that FTNT is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.67, FTNT is doing good in the industry, outperforming 73.67% 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 belongs to the top of the industry, outperforming 80.07% of the companies in the same industry.
A Debt/Equity ratio of 0.68 indicates that FTNT is somewhat dependend on debt financing.
FTNT's Debt to Equity ratio of 0.68 is on the low side compared to the rest of the industry. FTNT is outperformed by 69.39% of its industry peers.
Although FTNT does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 0.49 | ||
| Altman-Z | 5.67 |
ROIC/WACC3.55
WACC10.93%
2.3 Liquidity
A Current Ratio of 1.03 indicates that FTNT should not have too much problems paying its short term obligations.
FTNT's Current ratio of 1.03 is on the low side compared to the rest of the industry. FTNT is outperformed by 71.17% of its industry peers.
A Quick Ratio of 0.94 indicates that FTNT may have some problems paying its short term obligations.
The Quick ratio of FTNT (0.94) is worse than 73.31% of its industry peers.
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 | 1.03 | ||
| Quick Ratio | 0.94 |
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.
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.
Looking at the last year, FTNT shows a quite strong growth in Revenue. The Revenue has grown by 14.78% in the last year.
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)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
FTNT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.97% yearly.
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 Y8.48%
EPS Next 2Y9.58%
EPS Next 3Y10.22%
EPS Next 5Y8.97%
Revenue Next Year14.58%
Revenue Next 2Y13.08%
Revenue Next 3Y12.27%
Revenue Next 5Y13.02%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 30.47, the valuation of FTNT can be described as expensive.
64.77% of the companies in the same industry are more expensive than FTNT, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.28, FTNT is valued at the same level.
A Price/Forward Earnings ratio of 28.91 indicates a quite expensive valuation of FTNT.
FTNT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. FTNT is cheaper than 61.57% of the companies in the same industry.
FTNT's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 33.61.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.47 | ||
| Fwd PE | 28.91 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FTNT is valued a bit cheaper than the industry average as 74.02% of the companies are valued more expensively.
69.39% of the companies in the same industry are more expensive than FTNT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.08 | ||
| EV/EBITDA | 27.55 |
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.
PEG (NY)3.59
PEG (5Y)0.83
EPS Next 2Y9.58%
EPS Next 3Y10.22%
5. Dividend
5.1 Amount
No dividends for FTNT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
82.28
+0.49 (+0.6%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners71.66%
Inst Owner Change-1.75%
Ins Owners16.86%
Ins Owner Change-0.78%
Market Cap63.05B
Revenue(TTM)6.55B
Net Income(TTM)1.87B
Analysts68.4
Price Target91.48 (11.18%)
Short Float %3.19%
Short Ratio3.3
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)10.51%
Min EPS beat(2)6.18%
Max EPS beat(2)14.84%
EPS beat(4)4
Avg EPS beat(4)11.8%
Min EPS beat(4)6.18%
Max EPS beat(4)19.58%
EPS beat(8)8
Avg EPS beat(8)16.09%
EPS beat(12)12
Avg EPS beat(12)14.54%
EPS beat(16)16
Avg EPS beat(16)13.89%
Revenue beat(2)0
Avg Revenue beat(2)-1.19%
Min Revenue beat(2)-1.63%
Max Revenue beat(2)-0.75%
Revenue beat(4)1
Avg Revenue beat(4)-0.57%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)2.1%
Revenue beat(8)2
Avg Revenue beat(8)-0.57%
Revenue beat(12)3
Avg Revenue beat(12)-0.84%
Revenue beat(16)5
Avg Revenue beat(16)-0.44%
PT rev (1m)0.15%
PT rev (3m)-17.91%
EPS NQ rev (1m)0.01%
EPS NQ rev (3m)2.83%
EPS NY rev (1m)0.05%
EPS NY rev (3m)1.6%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.57%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.47 | ||
| Fwd PE | 28.91 | ||
| P/S | 9.62 | ||
| P/FCF | 31.08 | ||
| P/OCF | 25.76 | ||
| P/B | 85.77 | ||
| P/tB | 171.98 | ||
| EV/EBITDA | 27.55 |
EPS(TTM)2.7
EY3.28%
EPS(NY)2.85
Fwd EY3.46%
FCF(TTM)2.65
FCFY3.22%
OCF(TTM)3.19
OCFY3.88%
SpS8.55
BVpS0.96
TBVpS0.48
PEG (NY)3.59
PEG (5Y)0.83
Graham Number7.63
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.01% | ||
| ROE | 254.88% | ||
| ROCE | 44.21% | ||
| ROIC | 38.77% | ||
| ROICexc | 122.19% | ||
| ROICexgc | 163.76% | ||
| OM | 30.86% | ||
| PM (TTM) | 28.58% | ||
| GM | 80.86% | ||
| FCFM | 30.95% |
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%
ROICexgc growth 3Y23.93%
ROICexgc 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 Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 0.49 | ||
| Debt/EBITDA | 0.23 | ||
| Cap/Depr | 284.09% | ||
| Cap/Sales | 6.4% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 112.8% | ||
| Profit Quality | 108.26% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 5.67 |
F-Score8
WACC10.93%
ROIC/WACC3.55
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)26.17%
EPS 3Y43.86%
EPS 5Y36.84%
EPS Q2Q%17.46%
EPS Next Y8.48%
EPS Next 2Y9.58%
EPS Next 3Y10.22%
EPS Next 5Y8.97%
Revenue 1Y (TTM)14.78%
Revenue growth 3Y21.24%
Revenue growth 5Y22.46%
Sales Q2Q%14.38%
Revenue Next Year14.58%
Revenue Next 2Y13.08%
Revenue Next 3Y12.27%
Revenue Next 5Y13.02%
EBIT growth 1Y24.11%
EBIT growth 3Y41.66%
EBIT growth 5Y39.22%
EBIT Next Year19.33%
EBIT Next 3Y14.96%
EBIT Next 5Y16.33%
FCF growth 1Y-1.72%
FCF growth 3Y16%
FCF growth 5Y21.29%
OCF growth 1Y7.75%
OCF growth 3Y14.62%
OCF growth 5Y22.82%
FORTINET INC / FTNT FAQ
What is the ChartMill fundamental rating of FORTINET INC (FTNT) stock?
ChartMill assigns a fundamental rating of 7 / 10 to FTNT.
What is the valuation status for FTNT stock?
ChartMill assigns a valuation rating of 4 / 10 to FORTINET INC (FTNT). This can be considered as Fairly Valued.
How profitable is FORTINET INC (FTNT) stock?
FORTINET INC (FTNT) has a profitability rating of 9 / 10.
What is the earnings growth outlook for FORTINET INC?
The Earnings per Share (EPS) of FORTINET INC (FTNT) is expected to grow by 8.48% in the next year.