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Fortinet (FTNT) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Fortinet (FTNT) closed at $78.11 in the latest trading session, marking a -0.33% move from the prior day. This move lagged the S&P 500's daily loss of 0.07%. Elsewhere, the Dow gained 0.14%, while the tech-heavy Nasdaq lost 0.22%.

Prior to today's trading, shares of the network security company had lost 2.16% over the past month. This has lagged the Computer and Technology sector's gain of 5.05% and the S&P 500's gain of 4.58% in that time.

Investors will be hoping for strength from FTNT as it approaches its next earnings release. On that day, FTNT is projected to report earnings of $0.35 per share, which would represent year-over-year growth of 25.4%. Meanwhile, our latest consensus estimate is calling for revenue of $533.61 million, up 17.56% from the prior-year quarter.

FTNT's full-year Zacks Consensus Estimates are calling for earnings of $1.43 per share and revenue of $2.11 billion. These results would represent year-over-year changes of +26.37% and +17.28%, respectively.

It is also important to note the recent changes to analyst estimates for FTNT. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. FTNT currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, FTNT currently has a Forward P/E ratio of 34.86. Its industry sports an average Forward P/E of 39.16, so we one might conclude that FTNT is trading at a discount comparatively.

Meanwhile, FTNT's PEG ratio is currently 2.25. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Security stocks are, on average, holding a PEG ratio of 2.17 based on yesterday's closing prices.

The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 35, which puts it in the top 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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